The party is over? Or is it just one of the many corrections that have marked the history of Bitcoin since 2009? And then, beyond the price fluctuations, the attention that central banks and large investors have dedicated to cryptocurrencies still makes sense or is it appropriate to espouse the thesis of Larisa Yarovaya, former Paralympic swimming champion, who from the chair of the University of Southampton defines "cryptocurrencies the first case of inefficiency caused by the birth of a new technology". For this, she adds, “The only sensible solution is for bitcoin to disappear for the common good of the planet: it consumes more electricity than a medium-sized country, but with what advantage? It does not create jobs, it has no particular weight as a means of regulating trade. In short, it is a speculation that costs us a lot”. A paper by the Bank of Italy calculates that the energy consumption linked to cryptocurrencies is around 40 thousand times higher to that of the current payment system.
Obviously, those who are engaged in the game and who, in a matter of hours, sometimes minutes, have suffered losses from the thrill do not think so. Bitcoin is in free fall from the highs reached on April 14, coinciding with the Wall Street listing of Coinbase, the most important virtual currency trading platform. That day the bitcoin, traded in early 2020 it reached $64.820. Then a dizzying descent that gathered speed to a low of $30.202 at dawn today. At the end of the morning, after several aftershocks, Bitcoin trades at 32-33 thousand dollars. But the price is in constant evolution, given the very nature of the market which does not rest on a single market, but operates 24 hours a day, seven days a week, through a swarm of markets and flea markets which have recorded, at least on paper, losses of dizzying: between Tuesday and Wednesday cryptocurrencies left more than 470 billion dollars on the ground, or much more than the entire Milan Stock Exchange. The valuation of Bitcoin has thus been reduced to 721 billion (the entire capitalization of the sector, including Ethereum and Dogecoin, is approximately 1.600 billion).
Why the collapse? The trigger was China's decision to tighten strict limits on trading of cryptocurrencies by preventing financial institutions from providing transaction services. Beijing, which plans to create its own virtual currency, has thus dealt an almost fatal blow to the system: it is estimated that 65 percent of the "mines" that churn out cryptocurrencies using algorithms are located right in the heart of China. A system which, it seems, is powered by 60% coal for an overall consumption slightly lower than that of the whole of Sweden.
So much waste is at the origin of Elon Musk's "repentance". who, as a fervent supporter of cryptocurrencies, has taken a step back by reneging on the decision to admit Bitcoin as a means of payment for a Tesla. Moreover, Musk himself, already a hero of cryptocurrency adepts, went so far as to define Dogecoin as a "scam" in a television show. An about-face that is costing him in terms of popularity: suddenly the hero of Tesla and Space X has become FuckElon, the name of a new virtual currency for those seeking an explanation for the betrayal: Tesla, which in 2020 had grown by 743 %, today on Wall Street it is worth 18% less than at the beginning of the year. And he is having great difficulties in the Shanghai factory in China. He stands to see that the tycoon has decided to unleash hell on cryptocurrencies to divert attention from his troubles.
It will be like this? It seems impossible that the cryptocurrency world has entered a definitive crisis less than a month after the announcements of the giants of international finance (Morgan Stanley, JP Morgan and first of all Goldman Sachs) who have started heavy investments on their own or on behalf of customers. If anything, the news of recent months has shown that virtual currencies do not offer protection against inflation nor can they replace the role of gold. The impression is that blockchain technology is ripe to be adopted by central banks, attentive to an instrument capable of controlling liquidity flows, the only ones capable of correcting the collateral damage of the system, linked to pollution. Today, in the absence of interventions, "Bitcoin is really a dirty currency" jokes the Financial Times, alluding to the use of cryptocurrencies for money laundering operations.
