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To the stars despite price fluctuations: Cryptocurrencies are becoming the new normal

Although tweets by Elon Musk, the owner and founder of Tesla, have recently reduced the value of many cryptocurrencies, experts see that coins based on blockchain technology have come to stay and Estonia has a lot to win. However, to find winners and avoid losses, you have to do your homework and compare the different cryptocurrencies using simple criteria.

For example, the value of Bitcoin, which exceeded $63,000 in mid-April, has fallen to $35,845 by the second half of June. Price fluctuations are at least partly caused by tweets by Tesla CEO and founder Elon Musk. Initially, he raised the price of the cryptocurrency by announcing that Tesla had purchased a stake of 1.5 billion euros in Bitcoin, but then dropped the price later in May, leaving it at the lowest level it had been in three months. He did this through Twitter again by announcing that Tesla is abandoning its plan to accept Bitcoin as a means of payment and that, in general, the mining of cryptocurrencies is harmful to the environment and that Tesla could therefore sell its position.

But what will become of cryptocurrencies in five or ten years’ time, and how much attention should you be paying to tweets made by Elon Musk and others influencing the market? “Bitcoin’s energy consumption has been a big issue and does not fit Tesla’s or Elon Musk’s mission at all – so it seems the motivation for his tweets was the desire to earn a short-term profit. Just look at what Cristiano Ronaldo was able to do to the stock of Coca Cola at the European Football Championship,” he said, referring to the Portuguese striker’s decision to remove Coca Cola bottles from in front of him at a press conference which led to the company losing almost $4 billion in value in the span of just one night. At the same time, no one expects this to jeopardise the company’s future.

“Any movement on the market is better than no movement, because it creates opportunities for traders,” Kangro said.

Cryptocurrencies have come to stay

Hammerberg believes that in five to ten years’ time, cryptocurrencies will be the new normal and no one will look at them any differently from any other asset class. “Just as no one today thinks that a security is an entry in a database, or that money is an entry in a bank’s database,” he said. “Cryptocurrencies mean a financial system without borders, as evidenced by the fact that, according to the latest news, large US hedge funds want to invest a tenth of their assets into crypto in the next five years,” said Kangro in support of this opinion.

The expert explained that the blockchain allows for the creation of an open, reliable and accessible database on a larger scale that would eliminate double spending. “This means fewer intermediaries and costs, as well as easier and better access to the securities market, investment opportunities, and payment services among other things.” Hammerberg thinks that the technology behind cryptocurrencies will soon compete with traditional banking. “Different cryptocurrencies will be widely accepted as a means of payment in the future, as a result of which their liquidity will be high and price fluctuations lower,” he predicted.

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