Cryptocurrencies already exceed $ 2 billion in value

After quadrupling in the past six months, the value of all cryptocurrencies in circulation has just surpassed $ 2 billion. Almost as much as the combined rating of the groups that make up the French CAC 40.

The cryptocurrency market continues to grow exponentially in 2021 – at a staggering $ 2 billion in size, it is attracting more and more big names on Wall Street.

While one of the largest exchanges, Coinbase, prepares its IPO on Wednesday in the United States, looking back on a sector created from scratch in the last 12 years.

Bitcoin, the world’s first cryptocurrency

On October 31, 2008, in the wake of the financial crisis, one or more anonymous people, hiding behind Satoshi Nakamoto’s pseudonym, published the founding bitcoin white paper.

The objective, to create a means of payment, whose security would not be guaranteed by a central bank or financial institutions, but by an inviolable cryptology and a software-regulated emission with rules that are almost impossible to modify. Decentralization in response to the abuses of Wall Street.

Any individual can participate in the creation of new bitcoins, through a process called “mining”, which has since become more professional and is practiced mainly from giant data centers around the world, especially in China, where it is “ they extract ”about 75% of the new bitcoins. .

Almost 18.7 million bitcoins have been created since the first block of 50 bitcoins on January 2, 2009. Its final number, 21 million, is within the limits set by Satoshi Nakamoto. However, access to mining has become difficult because it is very expensive and therefore people use buying platforms, such as Coinbase, to buy cryptocurrencies. Banks and payment services like Paypal also offer the use of certain cryptocurrencies.

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It is more an investment than a means of payment

The volatility of the price of bitcoin, and the limitation in the number of simultaneous transactions, makes it difficult to use it as a means of payment. This doesn’t stop investors from taking an interest – some of them see bitcoin as a digital asset that could replace gold as a means of protecting themselves from central bank action and inflation.

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The most radical even await the return of the gold standard, but with bitcoin as a reserve; others simply take advantage of rising prices to make record profits. At $ 62,500 on Tuesday shortly after 11am, bitcoin is also evolving to a new all-time high and an impressive 810% year-on-year increase.

Electric vehicle maker Tesla announced in February that it had bought $ 1.5 billion in bitcoin, while its boss, visionary billionaire Elon Musk, regularly touts his merits on social media. Other large companies such as Square or MicroStrategy have also used part of their cash to acquire the most famous cryptocurrency.

After falling prices in 2018 and crossing the desert, the price has been breaking record after record since late 2020: from less than $ 12,000 in October, it surpassed $ 60,000 in March 2021.

Central banks regularly denounce the use of bitcoin as a means of payment for illicit purchases or fraud, and market regulators are concerned about the risks caused by volatility.

Cryptocurrencies are particularly popular in countries where inflation is skyrocketing: while the Nigerian naira has lost 50% of its value in recent years, a third of the inhabitants claim to have already used cryptocurrencies.

In Turkey, Argentina, Brazil, South Africa or even Colombia, more than 15% of the people surveyed as part of a survey conducted by Statista also claimed to have used (or had) cryptocurrencies.

Other cryptocurrencies

Many other cryptocurrencies seek to compete with or complement bitcoin. Number two on the market is Ethereum, which also hits a new all-time high of over $ 2,200 on Tuesday morning. The valuation of all cryptocurrencies in circulation has quadrupled since last November to reach more than 2 billion dollars according to the specialized site Coinmarketcap, which lists more than 9,000 different cryptocurrencies.

With the new increase observed today, the total size of the market even stands at 2.14 billion dollars. By comparison, the world’s highest-valued company, Apple, is worth $ 2.2 trillion. The 40 stocks of the Paris Stock Exchange’s flagship index, meanwhile, show a market capitalization slightly above $ 2.4 trillion at around 11:40 am on Tuesday.

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If the price of most crypto assets changes with purchases and sales, some seek to follow the price of traditional currencies (called “fiat”): these are “stablecoins”, which the creators promise to own as many dollars as they issue “coins ”. For their part, central banks are working on digital currency projects, which could also do without banks or banknotes. At the forefront of the issue, China launched experiments on the digital yuan in March, while the ECB and the Fed recently stated that they were looking into the issue.

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