The purpose of the article is to determine if Bitcoin is a speculative bubble or a monetary innovation. The results of our study show that Bitcoin is a monetary innovation that has suffered several speculative bubbles due to:
that it is not yet regulated;
the increased public interest;
and media interest.
Indeed, Bitcoin is a decentralized digital money system that is mainly acquired for speculative purposes or to protect savings wherever monetary inflation threatens it. It is the first decentralized cryptocurrency created in 2009 by a mysterious being named Satoshi Nakamoto. It is based on blockChain technology, which is a technology for storing and transmitting information. It is a huge database containing the history of all the exchanges made between its users since its creation.
It does not fully meet the requirement of a sovereign currency. For example, it is decentralized and not under the control of a central bank. In addition, it is oriented towards disinflation, unlike inflationary sovereign currencies.
When it was created, it was technically priced at $0 before reaching an all-time high of $18,800 in December 2017. At that time, it became a new asset class on which investment banks, investment funds, hedge funds create products to attract their clients. It is used in the real economy as a means of payment, a safe haven and a hedging instrument for some investors. Bitcoin supply is controlled by miners and buyers who see in it technological potential.
Demand, on the other hand, is created by specialized investors and the novice public. Since its creation, it has suffered market anomalies, currency platform hacking, exit-scam during ICOs and price manipulation due to trading algorithms.
It then becomes a subject at major international summits. Several consultations were conducted by financial institutions, including European, Asian, American and global financial institutions. Regulators and countries differ on its regulation and taxation. In terms of perspective, we think:
- the regulation by states and financial institutions of cryptocurrencies in general, and of it and blockChain in particular;
- that there will be the creation of new sovereign cryptocurrencies;
- the creation of bitcoin-indexed derivatives such as warrants, turbos, structured products, swaps and transactions such as loan-borrowing, repo etc……..
All this will make it possible to stabilize the economy around Bitcoin, to control its extreme volatility so that there will no longer be a succession of speculative bubbles. It will also help to explore the potential of blockChain technology. As for its value, its price was below $5,000 in the last quarter of 2018.