Bitcoin washed out by storm in financial markets
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Bitcoin washed out by storm in financial markets

Bitcoin washed out by storm in financial markets

The losses of the past week on the markets, in the context of the coronavirus crisis, do not benefit the famous cryptocurrency, which lost about 15%. And remains much more volatile than the main stock market indices.

By Agnès Lambert Posted yesterday at 6:00 am, updated at 8:04 am

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The Bitcoin logo at the “Consensus 2018” conference, held in New York in mid-May 2018.
The Bitcoin logo at the “Consensus 2018” conference, held in New York in mid-May 2018. MIKE SEGAR
In 2019, the price of bitcoin jumped 96% in 2019. No need to look: no other asset class has done better. Forgotten, therefore, the disappointing performance of 2018 - the most famous cryptocurrency, which celebrated its eleven years in January, had indeed lost 80% of its value.

But at 9,426 dollars (8,681 euros, on February 26), bitcoin is still far from the nearly 20,000 dollars reached in December 2017, its absolute record and it lost 15%, swept away by the storm on the financial markets. These few figures above all testify to the extreme volatility of its price, which can gain or lose 1,000 dollars in a few days.

Close to $ 1,000 in March 2017, the price of bitcoin had approached $ 20,000 nine months later.
Close to $ 1,000 in March 2017, the price of bitcoin had approached $ 20,000 nine months later. The world
An extremely cautious approach is therefore essential. Especially since cryptocurrencies are surrounded by a sulphurous aura. Anonymous and untraceable, they are often accused of being used to finance illicit activities - drugs, arms sales, etc.

The operation of bitcoin also threatens the climate: "mining" farms, large hangars grouping computers used to validate cryptocurrency transactions through complex computer calculations, consume an astronomical amount of electricity. According to calculations by the University of Cambridge, bitcoin alone currently represents 0.40% of global electricity consumption.

Beware of fraud
And that's not all: the extraordinary surge in prices has sparked the rise of fraudulent websites on the Internet that try to lure overly gullible savers with unrealistic earnings promises. The Autorité des Marchés Financiers (AMF) reports that 55 million euros in losses were declared to it by individuals in 2018 on crypto assets offered on this type of site, according to Capital magazine.

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The stock market policeman regularly updates his "black list" of intermediaries offering these assets without authorization. The law of May 2019 relating to the growth and transformation of businesses (Pact law) has also created the status of "service provider on digital assets".

"This is a guarantee of seriousness, customers will be able to identify platforms that comply with the regulations," said Manuel Valente, director of analysis and research for the French site Coinhouse, who is preparing his case. Same desire to obtain approval for Keplerk, a company which sells bitcoins in 5,200 tobacco shops. "We have contacted the AMF so that we can carry out the registrations provided for in the Pacte law," said Adil Zakhar, Keplerk’s managing director. Its customers buy an average of 200 euros worth of bitcoin, he said.

Once these precautions are taken, it remains possible for individuals to take advantage of the surge in bitcoin. "The price remains well oriented for the coming months because the next" halving "should take place in May, and it is generally the prelude to a bullish phase," explains Mr. Valente.

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The term "halving" refers to the fact that the monetary creation of bitcoin is halved approximately every four years, the last event taking place in July 2016. In other words, the rate of creation of bitcoins slows down. This reduction in supply generally results, market law obliges, by an increase in prices, at constant demand.

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However, not all share this enthusiasm. “The long-term prospects are not favorable. Libra, Facebook's cryptocurrency, which is scheduled to launch in 2020, poses a real risk because it would have a real use of means of payment and could therefore compete with bitcoin, "said Vincent Boy, market analyst at IG.

Total fraud (including theft) on crypto assets would have reached $ 4.5 billion in 2019

It also points to the risk of outright theft of bitcoins within storage platforms, by hackers using customer accounts.

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