Everyone is talking about it, few really know what it is. Bitcoins represent 62% of the cryptocurrency market, but there are many others. On March 12, 2021, the price of Bitcoin traded at around €47,840, the highest it has ever seen.
Photo: Charles-Louis Machuron (Silicon Luxembourg), Robert Goerend (Luther) and Jonathan Rodrigues (CBP Quilvest) during a Startup Apéro in Luxembourg in 2019 / Credits © Serge Deuces / Silicon Luxembourg
Since the beginning of 2021, the price of Bitcoin has continued to evolve without falling below the €24,500 mark. Based on blockchain and open source technology, cryptocurrencies offer a traceability of value that no bank can provide. This makes them mysterious, fascinating and completely disruptive.
To learn more, we met with Jonathan, a 35-year-old banker specializing in hedge funds. He has been passionate about and investing in cryptocurrencies since they first appeared, and gives us some key thoughts to ponder before jumping in.
Why are you interested in cryptocurrencies and how do they disrupt the traditional system?
The first time I heard about Bitcoin was in 2011 on BFM Business one Sunday morning. I will always remember it. Bitcoin was only worth a few cents at the time… I remember thinking that it was finally something revolutionary.
In 2009, Bitcoin, based on a public blockchain protocol, reminded us that money is above all a technology. It was time for this technology to evolve.
A blockchain, also called “distributed ledger”, is a new technology based on a peer-to-peer system. It allows many applications that are not limited to the exchange of crypto-assets.
In the same way that the Internet has had a huge impact on the exchange of information between individuals, cryptos based on the Blockchain will change our habits in terms of value exchange while eliminating intermediaries and relying on an incorruptible register. Blockchain-based applications and the various categories of crypto-assets will revolutionize certain sectors of activity such as: commerce, logistics, finance, energy, gaming, art, etc.
“Bitcoin is attracting an increasing number of investors looking for diversification and protection against inflation, despite its high volatility.”
Why is the Bitcoin explosion happening now?
Bitcoin is getting a lot of media coverage these days thanks to increased adoption, even by institutional players. Bitcoin is attracting an increasing number of investors looking for diversification and protection against inflation, despite its high volatility. Its various attributes are scarcity, transparency, security and a certain intrinsic value.
The phenomenon of accelerated scarcity, called “Halving” (division by half of the mining bonus) has an indirect impact on the valuation of Bitcoin. Halving occurs about every four years. The next one, which will be the 4th halving, is expected to take place in 2024.
Social networks also have an important part in the rise of Bitcoins and other cryptocurrencies in the last four months.
What advice can you give to those who want to invest in cryptocurrencies?
First and foremost, it requires an investment of time in learning. Do not invest money without understanding and being aware of the risks of significant losses.
There are very good quality online courses for beginners on the Coursera platform. The website journalducoin.com does an excellent job in teaching cryptocurrencies.
This article was first published in Silicon Luxembourg magazine. Read our full Fintech edition.