If you have been keeping up at all with global fintech news over the past few weeks, then there’s no doubt that cryptocurrency and bitcoin news have been flooding the scene. The rush really started when billionaire entrepreneur Elon Musk made the decision to purchase over €1.2 billion in bitcoin and announced that Tesla will soon accept it as a legitimate payment method. This prompted companies such as Mastercard and PayPal to join the scene and make announcements that cryptos that meet a well-defined criteria will be available for use for customers and merchants. The broader crypto market is up €615 billion from what it was at the beginning of February, to a total valuation of nearly €830 billion.
The leader of the pack is the famous bitcoin, which surged over 20% just this past week. The second and third most popular cryptocurrencies, ether and binance coin, saw similar and even way larger surges, at approximately 15% and 120% each. Experts have concluded that the biggest influence on this crazy surge in value is in fact the major moves Elon Musk made to kick off the trend in a big way. Recently Elon Musk actually tweeted regarding the situation stating that crypto prices “do seem high” but actually act as a better safety net towards inflation than the typical gold standard.
Investors looking to get heavily involved in crypto at this point should be wary that a bubble may be forming, which could lead to economic turmoil. Suspicion is rising as the price seems to be increasing at an unstable and fast pace, which usually indicates far too much hopeful speculation and an eventual crash, but it also wouldn’t be bitcoin’s first time experiencing this. Actually back in 2018 bitcoin was on a similar upward trend, thanks in large part to trading exchanges such as Coinbase which have made purchasing and selling cryptos very convenient for anyone looking to get involved, but it eventually crashed over 80%, large part due to countries like South Korea cracking down on crypto trading. One of the biggest differences that could make this current upward trend more stable than that one is that in 2018 less merchants were still willing to give crypto a chance of being accepted as a currency, but we can see that’s not the case anymore. If they do in fact end up being accepted and the value is less volatile, we could see a huge shift in the landscape at how all future transactions are made.