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Bitcoin: who's who in the cryptocurrency 'war' (and how it can affect you)
"It's a shit coin," New York University economist Nouriel Roubini said a while ago, referring to bitcoin, the world's largest digital currency. Tycoon Warren Buffett, for his part, assured that cryptocurrencies are one of the worst bubbles of all time.
And Bank of England President Andrew Bailey warned a few weeks ago: "Buy if you're prepared to lose all your money." Among the cryptoskeptics are Nobel Prize winners in economics Joseph Stiglitz, Paul Krugman and Robert Shiller, although they no longer prophesy that these coins will disappear at once. In the last year, the cryptocurrency market has grown, reaching a total market value estimated at around US$ 2 trillion (R$ 10 trillion). And it continues to expand regardless of all regulations. No one is in control of cryptocurrencies — no government, no central bank, no business. Despite this, El Salvador this week became the first country in the world to adopt bitcoin as its currency.
Because they work with a decentralized technology called the blockchain, cryptocurrency transactions do not require an intermediary or an agency to validate them.
Through a gigantic network of computers with "knots" spread around the world, it uses cryptographic methods to protect the information contained in money transfers and in the creation of new units. This operating autonomy makes the millions of dollars circulating in its networks difficult for governments, central banks and regulatory bodies to control and supervise.
'We are at a crossroads'
On the other side of the battlefront are those who promote the use of cryptocurrencies and are convinced that their expansion is inevitable. They not only see them as a profitable long-term investment opportunity, but as a paradigm shift in the international monetary system. They believe this market will shake the world of politics, economics and finance.
jack Dorsey, CEO do Twitter, e um dos maiores entusiastas das criptomoedas
"We are at a crossroads," says Javier Pastor, commercial director of the cryptocurrency trading platform Bit2Me, in an interview with BBC News Mundo, the BBC's Spanish-language service. "Cryptocurrencies are going to change the world in the same way the internet has changed," he adds, ensuring that we are witnessing the birth of a new stage in the history of the evolution of money. "The money that central banks print endlessly will be worth absolutely nothing in a few years. It will die in the face of technological innovation that are cryptocurrencies," he says.
One of the most famous proponents of bitcoin and cryptocurrencies is Jack Dorsey, CEO of Twitter and Square. "Bitcoin changes everything... for the better," he tweeted. And in another post, he wrote that no person or institution "will be able to change or stop him". Dorsey is so convinced of this that in 2018 he declared he believed bitcoin would be "the world's only currency in 10 years". And in January of this year, when the Financial Crime Control Network (FinCen) proposed the creation of a law requiring companies to disclose the names and addresses of people who carry out operations with cryptocurrencies above US$ 3,000 to monitor illicit transactions, Dorsey objected in an open letter
Changpeng "CZ" Zhao, CEO of Binance, the world's largest cryptocurrency trading platform in terms of transaction volume, warned a few days ago that it was impossible for an entity to destroy bitcoin and its underlying technology, the blockchain. "I don't think anyone can erase it now, as this technology, this concept, is on the minds of 500 million people," he argued at CoinDesk's Consensus 2021 web conference. Zhao added that governments and regulators should embrace blockchain technology and cryptocurrencies — and that fighting them is akin to rejecting Amazon's business model in the early 1990s. Cryptocurrencies are not here to end traditional finance or government-backed currencies, but to bring more "freedom of money". 'They Can Threaten the Monetary Sovereignty of Any Country' "There is little money in the cryptocurrency market, and they do not pose a threat to the financial system for the time being," Josh Lipsky, director of the Geoeconomic Center of the international analyst organization Atlantic Council, in the United States, tells BBC World News. However, he warns that their rapid growth in just a few months has made them more important. "In a year we could see further expansion of the cryptocurrency market. That's why regulators around the world are thinking about what kind of new standards might be needed," says Lipsky. The biggest risk of cryptocurrencies is that "they can threaten the monetary sovereignty of any country", says the senior adviser to the former director of the International Monetary Fund (IMF), Christine Lagarde. “If you, as a central bank, don't know how much money has been spent and transferred in your country, that has huge implications for your monetary policy and for how you measure inflation and interest rates. tax", he adds. "All countries should be concerned about the loss of monetary sovereignty. They cannot lose control of how much money is printed and spent." Projecting the future scenario, Lipsky believes that governments will create their own digital currencies and these will compete in the market with cryptocurrencies. With this perspective, the researcher believes that the digital currency market should be regulated to protect people from scams and ensure that the money is used for the proper purposes. The attack by governments and central banks
In the United States, the discussion is open. "They're really means for speculation," said Jerome Powell, chairman of the Federal Reserve (FED), the US Central Bank, in mid-April. "The effective functioning of our economy requires that people have faith and trust not just in the dollar, but also in payment networks, banks and other payment service providers that allow money to flow on a daily basis," he added. These comments add to what Treasury Secretary Janet Yellen had previously expressed when she referred to bitcoin as "a highly speculative asset" and an "extremely inefficient way of transacting". A few days ago, Gary Gensler, chairman of the SEC, the main US financial regulator, warned lawmakers that digital currencies raise important policy and investor protection issues, in what some interpreted as possible tighter oversight during the US government. President Joe Biden. "I look forward to working with other regulators and Congress to fill the investor protection gaps in these cryptocurrency markets," Gensler signaled. At the global level, central banks began to speak out. Known as the "bank of central banks," the Swiss-based Bank for International Settlements (BIS) has made it clear that it is at war with cryptocurrencies. "Investors should be aware that bitcoin may well collapse completely," said Agustin Carstens, general manager of the BIS, in late January. Bitcoin is inherently risky, he added, and only central banks should issue digital coins.
The Wall Street Turnaround
While some still think that cryptocurrencies were created for the sole purpose of being used by criminals who sell weapons and drugs illicitly, their rapid adoption by the financial world over the past year has given them broader recognition as an investment tool. With each passing day, new big names enter the game, like the giants of the investment banks Goldman Sachs, JP Morgan and Morgan Stanley, which opened the doors to cryptocurrencies. In fact, Morgan Stanley became the first of the big US banks to offer their clients access to bitcoin funds in mid-March. And in late May, Mathew McDermott, head of Digital Assets at Goldman Sachs, declared that "bitcoin is now considered an asset to invest in." "It's rare that we can witness the emergence of a new asset class," he added. Among those not keen on cryptocurrencies is Raymond Dalio, founder of Bridgewater Associates, the world's largest venture capital fund. In late May, he told a business conference that he had "some" bitcoins, but warned that governments have the "ability to control" cryptocurrencies. "They know where they are and what's going on," he said. On the other hand, other investors like Cathie Wood, founder of Ark Investments, insist that the authorities "can't stop them". Another cryptoskeptic is Larry Fink, CEO of BlackRock, the world's largest asset management company. He said his company is tracking the evolution of the cryptocurrency market, but it is too early to determine whether cryptocurrencies are "just a speculative tool". What is no secret is that the companies that move the largest volume of capital created teams dedicated exclusively to analyzing the behavior of this market, which, during the pandemic, registered explosive growth.
