German central bank Bundesbank warned its users about Bitcoin's volatility, expressing its concern about the instability of the crypto currency market. The bank also stressed that Bitcoin is not as secure as reserve currencies, such as the euro or the US dollar.
In a bank statement, Bundesbank board member Karl-Ludwig Thiele said:
"Bitcoin is an object of speculation, the value of which is changing rapidly. Perhaps, recently he experienced steep climbs, but in the past everything was different. "
Cost bitcoin is not set by the managing organization. Thus, its price is a real representation of its value, which originates in the global market. Fate money, on the contrary, is supported and controlled by the government. With inflationary fluctuations, governments can emit cash at their own discretion and thus keep the course at the desired level.
The increase in the value of bitcoins is viewed by traditional institutions as volatility, in a technical sense. Indeed, Bitcoin is volatile, and volatility is crucial to the development of the network. If the bitcoin price does not increase and remains stable at the current value, this will indicate a low growth rate of users. Since the Bitcoin network is experiencing a period of rapid growth in the number of users and institutional investors, the price of bitcoins must inevitably grow.
However, Tile's statement about Bitcoin contains a fundamentally erroneous argument. The euro or the US dollar, or any fiat currency, is not safer than bitcoat, solely because of the existence of a central administrative entity.
For example, in India, the radical decision of the Prime Minister of the country, Narendra Modi, to withdraw from circulation phiatic notes worth 500 and 1000 rupees led to a nationwide financial crisis. Almost 90 percent of the country's ATMs lack banknotes, and as a result, residents can not get enough money for their daily activities. Characterize such a monetary system as a "safer" option compared to Bitcoin, at least, strange.
Seems to me that banks are just afraid of bitcoin and other cryptocurrencies because if this becomes some kind of standard, what will their business be? They wont be able to use something that they can not create.
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You make a great point about fiat currencies. Case in point is the current state of Venezuelan economy. A first world country slipping back into third world status. It goes without saying that bitcoin is safer that Venezuelan fiat at the moment.
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