The long-term purpose of cryptocurrencies: Will it remain speculative?

The crypto markets are currently on the move. That's why many people are asking themselves whether this is just speculation. Even if no one is able to make a precise statement, it is already clear that cryptocurrencies are both very interesting and profitable. In addition, cryptocurrencies also introduced blockchain technology, which has a special significance not only for the world of cryptocurrencies.

Overall, this technology provides a huge change, improvement and facilitation in terms of administration. For the use of cryptocurrencies, in addition to the investment option, there is also the possibility of direct payment. This also applies, for example, to payment in online casinos. Crypto casinos allow the deposit to the customer account also with cryptocurrency. 

The cryptocurrencies and the online casinos

In Germany, for example, the situation is as follows: There will be a new State Treaty on Gaming, which is due to come into force in July 2021. This will bring with it a number of changes. First and foremost, it ensures the long-awaited liberalization of the gambling market in Germany and also focuses on player and youth protection. However, this is also accompanied by various limitations that are not very welcome in the world of gamblers.

For one, the new version of this law provides for a 1-euro wagering rule. This means that you are only allowed to bet one euro per spin on the slots. For high rollers, this means that their usual way of playing has now become absolutely impossible. Online casinos are equally affected here, as they can thus no longer offer their players an appropriate platform.

The regulation of the 1000 Euro limit means an equally big cut. Players are now only able to deposit a maximum of 1000 euros per month into their player account. Even though this may sound like a high sum at first, it is still an enormous restriction for users.

It is quite conceivable that a player will achieve quite high winnings. If he then wants to use these with another provider to challenge his luck again, this is impossible, provided he has already used the 1000 euros on his account in the month in question. This regulation is particularly annoying, as it does not distinguish at all whether a player has realized winnings or losses. In addition, the personal income situation is also not taken into account here in any way.

 

The only possibility to continue playing without restrictions at this point could be the payment with a cryptocurrency, since this is officially not considered money and therefore the gambling law could not apply here.

What is the long-term purpose of cryptocurrencies?

When the Bitcoin came onto the market in 2009, it had no value at all, but soon its value climbed to $20,000. Subsequently, the price of the Bitcoin continued to climb unceasingly until it recently cracked the magic mark of $50,000.

It can probably be assumed that cryptocurrencies will definitely serve a long-term purpose, because not only the extremely profitable development of cryptocurrencies indicates this, but also the steadily increasing interest of companies, banks and governments.

The financial service provider PayPal wants to accept the cryptocurrencies Ethereum, Bitcoin Cash and Litecoin in addition to Bitcoin in the future. Reason enough for analysts and experts to assume that cryptocurrencies are in for a tremendous development. In this context, PayPal is primarily classified as a link between the cryptocurrencies and the users.

The latest developments give analysts sufficient reason to assume that the Bitcoin price could move between $70,000 and $150,000 by the end of the year. Citigroup, a major U.S. bank, predicts even much higher price increases, which could reach $318,000.

Assuming that cryptocurrencies, and Bitcoin in particular, will last in the long term, it should not be forgotten here that Bitcoin inventor Satoshi Nakamoto has ensured two other special features. Unlike all other currencies, Bitcoin is inflation-proof. This was achieved because the inventor limited the number of Bitcoins ever on the market to 21 million right at the beginning.

The fact that cryptocurrencies are managed in a decentralized manner is another and extremely important factor. In this way, neither banks nor governments can influence cryptocurrencies. Blockchain technology plays the absolute main role here, it ensures decentralized management. 

Investors recognize the opportunities here

When even the major investors participate in this market, there can hardly be any question of pure speculation. The large investors include, for example, pension funds, banks and also hedge funds, or family offices.

Above all, the large investors have ensured the upswing of Bitcoin, this is shown by a statistic from 2020. The holders of particularly high Bitcoin accounts are called whales. The whale index has just recently reached a new record high. Currently, there are said to be more than 2200 large accounts, each of which contains at least 1000 Bitcoins.

Compared to 2018, this is a 37 percent increase. The increase in the trading volume of bitcoin futures contracts on the American stock exchange also clearly shows that there is still a steady increase in demand from institutional investors.

According to experts, professional investors are responsible for the high liquidity in the market. The low interest rate policy is probably the main culprit for the fact that the stock markets are so highly valued, and thus the cryptocurrencies in particular offer a good alternative.

Major investor and Tesla CEO Elon Musk made particular headlines when he made a $1.5 billion investment in bitcoin. On top of that, the Tesla boss is thinking of accepting Bitcoin as a means of payment in the future.

Even more supporters for cryptocurrencies

By investing in Bitcoin, many large companies have already set a clear signal. Even the major bank is now considering an investment in Bitcoin. Within its network, Mastercard also wants to allow cryptocurrencies in the future.

The fund giant Blackrock, the world's largest investment company, is also among the supporters of Bitcoin. Already in January, Blackrock opened the first two funds for Bitcoin investments.

The cryptocurrencies and especially the Bitcoin are now no longer a niche investment in the view of the experts. The entire industry is now looking eagerly at Bitcoin and the entire development on the crypto market.