Is not bitcoin really manipulated?

When we speak of a cryptocurrency, the first that comes to mind is Bitcoin, a virtual currency born in January 2009 that is currently giving much to talk about in all the media and economic portals of the world.



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With the appearance of the Blockchain and the virtual currency, there are already many liberal economists who express their anxious desire that this currency gain ground in the currency market and be positioned against the rest of currencies of legal tender.

This desire for the cryptocurrency to become a currency stronger than the traditional currency comes from the belief that traditional currencies are heavily intervened by central banks, while the new digital currencies show a much greater liberalization, since their The price is governed by the free market and supply and demand, not by the monetary policies adopted by a government.

This is something that at first glance can seem fantastic for some, since a little-intervened currency, it could be said that it would be a much healthier and more sustainable currency, since it is much less manipulated by the monetary authorities.

The problem with this is, are cryptocurrencies not really manipulated?

When we speak of a cryptocurrency, the first that comes to mind is Bitcoin, a virtual currency born in January 2009 that is currently giving much to talk about in all the media and economic portals of the world. Bitcoin is one of the most famous commercialized cryptocurrencies on the market today, as well as being one of the pioneers in the blockchain industry.

Many economists and technologists speak of Bitcoin as the currency of the future, the candidate to substitute traditional currencies, a free and healthy currency, which is destined to be the one in charge of banishing other currencies that are in the market and that, They say they are very manipulated and corrupted by central banks.

As we have commented, when we speak of Bitcoin, our first impression may seem very positive, since we are talking about a free currency, a currency without manipulations, governed simply by the supply and demand presented by the market.

Are cryptocurrencies like bitcoin not really manipulated?

With the appearance of the Blockchain and the virtual currency, there are already many liberal economists who express their anxious desire that this currency gain ground in the currency market and be positioned against the rest of currencies of legal tender.

This desire for the cryptocurrency to become a currency stronger than the traditional currency comes from the belief that traditional currencies are heavily intervened by central banks, while the new digital currencies show a much greater liberalization, since their The price is governed by the free market and supply and demand, not by the monetary policies adopted by a government.

This is something that at first glance can seem fantastic for some, since a little-intervened currency, it could be said that it would be a much healthier and more sustainable currency, since it is much less manipulated by the monetary authorities.

The problem with this is, are cryptocurrencies not really manipulated?

When we speak of a cryptocurrency, the first that comes to mind is Bitcoin, a virtual currency born in January 2009 that is currently giving much to talk about in all the media and economic portals of the world. Bitcoin is one of the most famous commercialized cryptocurrencies on the market today, as well as being one of the pioneers in the blockchain industry.

Many economists and technologists speak of Bitcoin as the currency of the future, the candidate to substitute traditional currencies, a free and healthy currency, which is destined to be the one in charge of banishing other currencies that are in the market and that, They say they are very manipulated and corrupted by central banks.

As we have commented, when we speak of Bitcoin, our first impression may seem very positive, since we are talking about a free currency, a currency without manipulations, governed simply by the supply and demand presented by the market.

This is a completely correct statement, but is not the price of Bitcoin really being manipulated?

If we look at the historical quote of Bitcoin, we can see how the price of this cryptocurrency has had some brutal ups and downs. While other legal tender currencies such as the Pound or the Dollar were affected by the changes and risks presented by the geopolitical environment, Bitcoin was the only currency that continued to accumulate rallies, reaching in just 2 years an approximate rebound to the 2,400%.

This situation, in a certain way, makes us doubt if this currency is not manipulated or sustained by someone, since the normal thing or the current thing is that with the risks that the political situation of the countries suffered, this currency would have been dragged and had reduced its growth at a less accelerated pace.

You can probably think that these geopolitical risks should not affect Bitcoin, since it is a free currency and therefore, is not affected by the geopolitical situation. True, the question now is, if this cryptocurrency is not affected by the geopolitical situation, what is the reason for the high volatility of its quotation?

The answer is simple, this high volatility is due to market speculation in Bitcoin. Although there are many people who talk about Bitcoin is not a bubble, we have to say that what it is, is the fashion asset of the market. For investors, if your portfolio has a percentage, however small, in Bitcoin, it seems that we are talking about a portfolio with a good composition, simply because it integrates a percentage of Bitcoin.

When we talk about Bitcoin in our social circles, we seem to be talking about the new Google, the new technological giant, the solution to all the world's problems, while the media puts pressure on the other side with the brilliant comics of failures that became billionaires by the purchase of 13 Bitcoin or how a pizza maker's life changed when they paid for an order with Bitcoin and how that order has been revalued to date, reaching millions of dollars.
Although they think that this coin is not manipulated, it is true that in theory, it is not manipulated, the problem is when we put it into practice and observe the historical ones. When we put it into practice, we can observe the thousands of Bitcoin buyers who have entered the market, simply by being carried away by the emotion and the thought of revaluation of this currency.

A serious problem for Bitcoin, because when the panic spreads and the expectations of these buyers are not met, as inexperienced investors, they run away from the market, closing their positions and leaving big crashes like the one we saw in January this 2018.

It is true that the Bitcoin is not a currency manipulated by the central governments, since it is not governed by its authorities and the printing is limited to 21 million Bitcoin, but even so, the use that is being given to this currency in the Today is purely speculative. The Bitcoin, currently, is a currency used simply to invest in a value that, if you are lucky, can hit a strong upturn that leaves you good returns due to its volatility, but in the same way, you can leave with the empty pockets

We must be careful with Bitcoin. Some economists claim that this cryptocurrency is not a bubble due to the perception of risk by buyers. According to these economists, simply by knowing that investing in Bitcoin carries a risk, it is already exempt from being a bubble but, did not subprime mortgage contractors know that there was a risk in the purchase of housing during the housing bubble?

From my point of view, I think that the bubble exemption is not that the investor is aware that the purchase of Bitcoin carries a risk, in fact, many of these investors know that investing, whatever the asset, carries a risk associated. What I think is that the real difficulty is if investors know the degree of risk involved in Bitcoin, which is extremely high.

As we have said, this currency is a speculative currency, at least until now, so we must take into account the great risk involved when investing in it. In addition, we must be aware that its extreme volatility can lead to the loss of all our investment quickly.

If you are going to invest in it or are thinking of doing it, you have a lot of information in the network where you can inform yourself about it, but yes, you must not forget that as almost all assets are, in a certain way, manipulated by something. As in many assets, there are large manipulators that invest large amounts of dollars in Bitcoin.

Without going any further, a few months ago, Peter Thiel, co-founder of Pay Pal made an investment through its venture capital fund in Bitcoin. Specifically, this investment was quantified in a sum close to 20 million dollars. Well, since the realization of that investment by the great founding businessman of Paypal, the Bitcoin's price suffered a 14% rise in a matter of hours, reaching 15,400% per currency.

With this fact, we can see the high impact of a large investment in this asset, so it would be easy to imagine what would happen if this technological guru withdrew his investment. For these same reasons we can not state categorically that this currency is not manipulated. Although it is not manipulated by central banks, its price is subject to the speculation of large investors such as Peter Thiel, among others.

These specific investment decisions quickly modify Bitcoin's quotation, the problem is that it is not known when these investments will be made or when they will be withdrawn to invest in the precise moments, so we must be cautious with this currency and know that, As usual, the one who always loses is the small investor.