Bitcoin Quality Support
One collateral result of the current distortion of markets, including of those in Eastern Europe which are flooded with large amounts of liquidity and where low interest rates are applied, is that many peoples started to turn to innovative schemes/platforms to place their money/savings. Moreover, the main cryptocurrency, bitcoin, was in bubble mode during 2017-2018. Its price increased from 700 US dollars at the beginning of 2017 to a peak of 19,666 US dollars, registered on December 17, 2017. It subsequently decreased to around 11,000 US dollars and then increased again to around 15,000 US dollars following severe warnings from regulators (such as China and South Korea) that such levels may not be sustainable and measures will be soon introduced. It is currently in the range of 3,500 – 5,000 US dollars. Bitcoin and other instruments using blockchain technology are not regulated by the central banks or indeed by any other financial authorities.
- Basically, cryptocurrencies are unpredictable and unstable. Generating and holding cryptocurrencies is highly speculative and it is very likely that these virtual assets will eventually deflate.
- The fact that the rates are currently so low could be a stimulating factor to place money into cryptocurrencies where investors hope that the capital gains will be much higher.