Bitcoin’s value is sky high these days. It has traded for over $18,300, which is unheard of in the last three years, and it is not far off its highest value on recordin December 2017. What do you attribute this to?

Three things can affect the value of Bitcoin and all cryptocurrencies in general. First, the large speculative factor, which due to its highly technological and innovativeprofile, means this phenomenon is perceived as unusual and subject to very abrupt changes. Second, the great uncertainty of the international economy following the crash in 2008, the trade war between the United States and China, and all the doubts raised by COVID-19 (its origin, accountability, duration, real impact, etc.). Lastly, the underlying technology and the value it can create.

Its value has dropped significantlyduring the pandemic, just as on the stock market. Why this change of trend?

It has peaked and troughed a lot in recent days, almost reaching its 2017 peak of $20,000. I believe that these sudden changes are the result of the first two reasons mentioned above i.e., speculation and great uncertainty, and the synergy between them.

Do you think young people and millennials can give a definitive boost to Bitcoin and break away from the banking system?

There is no doubt that young people are incredibly flexible and quick to adjust to new technology. They do have a significant comparative advantage in using a technology as innovative as blockchain, but they are also more open to understanding what it really stands for, beyond its speculative nature. That is why I believe that change and the widespread use of cryptocurrencies lies with them, more than in anyone else. Traditional banking, together with central banks and their unregulated money-issuing policy, are undoubtedly the greatest obstacle to overcome. Cryptocurrencies, and particularly blockchain, have shown that these entities are obsolete and revealed their true nature.  Traditional banking and central banks form part of a powerful legal monopoly that is being challenged by this new technology. I believe they are incompatible, as central and traditional banking represent centralisation and clientelism, while cryptocurrencies represent decentralisation and competition. This does not mean, however, that they cannot coexist, only that they will most probably be monitoring each other.

Do you think we will start moving away from more traditional investments in favour of Bitcoin, or are we still a long way from that?

Although this is already happening, it should be noted that the capitalisation of the crytomarket is still very low and represents a fraction of other more traditional markets. At the end of November, the cryptomarket cap was approximately $575 billion, while gold’s market cap stood at $9 trillion, that’s three more zeros. It is important to bear in mind that the capitalisation of the gold market has also grown in recent years, not just the cryptomarket.

Is gold still being considered as an investment?

Yes, gold has always been the quintessential investment in times of uncertainty and it still is. It is the most prestigious store of value and has been around for more than 5,000 years. In recent years, Russia, China, and to a lesser extent India, have seen their gold reserves grow significantly. No wonder those are the countries, especially China, that are disputing the hegemony of international trade with the United States.

What is the profile of a Bitcoin investor?

I think it is worth identifying them in waves. The first ones to take an interest in cryptocurrencies were visionaries and idealists with strong libertarian principles and a fondness for technology. An interesting combination that generates an almost blind faith from the beginning, in the fact that cryptocurrencies are here to stay and will ideally put an end to paper money and the monopoly of traditional banking and central banks. Expressions such as “hodl” (“hold”, spelt wrong)refer to this confidence in the cryptomarket at all costs, and are now catchwords that describe the phenomenon very well, and above all, the spirit that prevailed in the early days. On the other hand, the following waves of enthusiastshave been more speculative, which has somewhat damaged the image of the cryptomarket but, paradoxically, has also helped by putting it in the spotlight.

Is Bitcoin the fastest growing cryptocurrency or are there others? If so, what are they?

Bitcoin represents the most important cryptocurrencyin the cryptomarket, with more than 60% of the capitalisation. Consequently,it has the greatest inertia, but not necessarily the best technological properties. That being said, it is a very changing world, and cryptocurrencies can be quickly adjusted and adapted as long as there is a consensus among users. Ethereum and Ripple, the next biggest currencies, have a capitalisation of approximately 12 and 5% respectively. However, they do not have the traction and inertia of Bitcoin and are possibly less anonymous and not as decentralised. They may be technologicallysuperior, but I think these last attributes are a step backwards, and Bitcoin will always be able to learn from the rest of the altcoins (as the other alternative cryptocurrencies are known). Today, coinmarketcap.com, a major reference, registers almost 8,000 cryptocurrencies that make up a total value of $575 billion.

Do you think that cryptocurrencies should be regulated in countries' economic and legal systems? Which countries have already done so and what is the situation in Spain?

I do not think this is the right question. We really should be asking whether they will be able to regulate them at all. Yes, cryptomarkets could be shut down, but interestingly enough, I understand that at least originally, they were created to evade any kind of intervention or manipulation. I do not believe in government initiatives to adopt cryptocurrencies as a currency. By their very nature, cryptocurrencies represent the opposite of central authority. They are decentralised virtual assets and subject to a consensus generated from their own ecosystem and the number of users. The more users there are, the stronger that consensus is and the harder it is to manipulate, which also makes it safer.