Investor Michael Burry predicted in a tweet that cryptocurrencies will crash and the “mother of all crashes” will occur.
Philipp Sandner, Head of the Frankfurt School Blockchain Center and one of the most renowned Bitcoin experts in Germany, considers this statement to be “complete nonsense”.
Since China has tightened the regulation of cryptocurrencies, parts of the crash have already been there in recent months, says Sandner. He is optimistic about the future of Bitcoin.
It was a tweet that disappointed Bitcoin fans: investor legend Michael Burry advised private investors against investing in cryptocurrencies. In June, the man who predicted the real estate crisis in 2009 warned of devastating damage and the “mother of all crashes.” If crypto were to crash, “the losses will be the size of entire countries.”
The “mother of all crashes”? “Total nonsense,” replies Prof. Dr. Philipp Sandner, Head of the Frankfurt School Blockchain Center and one of the most renowned Bitcoin experts in Germany. “The opposite of a crash is the case with the current crypto development,” Sandner said in an interview with Business Insider.
When the Bitcoin expert speaks to banks, stock exchanges and investors in Germany, Europe and elsewhere, the interest in crypto currencies is “huge”. “Very, very many companies are dealing with it. Everyone is starting to build their first infrastructures so that professional investors can also invest, ”reports the top economist. At the moment, the cryptocurrency is still a game for private investors, which, according to Sandner’s observations, will soon change.
Furthermore, the growing number of wallets, i.e. digital purses, would show that Bitcoin is being accepted more and more by people and is becoming more widespread, says Sandner. This can also be seen in countries such as El Salvador, where Bitcoin was recognized as the official currency. Bitcoin is therefore taken more seriously and not, as it was a few years ago, only associated with payments in the darknet, for example.
“The traffic light for Bitcoin is clearly green”
On top of that, according to Sandner, there is the issue of inflation. “We are preparing for inflation to rise even further. Then it is precisely assets such as gold, real estate, stocks and even bitcoins that will benefit from it. ”Because of inflation, investors are looking for ways to invest their money with an attractive return. This leads to real assets rising in price – including Bitcoin, according to Sandner. That is why the economic expert sees the “traffic light with Bitcoin clearly being green.” One shouldn’t let the short-term fluctuations drive you crazy. “There will always be volatility, like with gold,” explains Sandner. However, he is certain that the intensity of the fluctuations will decrease over the next few years.
In addition, the economist says that China’s Krpyto regulations have already caused part of the crash in recent months. China has further tightened its course against crypto by closing numerous data centers that slurp bitcoins and banning banks and other large fintech companies from offering crypto trading services. The Bitcoin price then fell from just under 50,000 euros to below the 30,000 euros mark. In the meantime, Bitcoin has picked itself up again and is currently worth around 35,000 euros.
Elon Musk’s tweets have also increased the price fluctuations, explains Sandner. Sometimes the Tesla boss announces that his car company will allow payments with crypto currencies, sometimes he corrects his decision – that caused the exchange rate to fluctuate sharply. However, this would not have a long-term effect on the price.
Sandner’s final verdict: “To be honest, I think it’s completely wrong to speak of a crash and people who say that have mostly not dealt intensively with the matter.”