Bitcoin: 2022 was the worst in 14 years of operation of the asset

14 years ago, in the middle of the financial crisis generated in the United States and which had effects in several countries, the so-called bitcoin cryptocurrency began to operate, which promised to free humanity “from the fraud of central banks and the oppression of the State”, since it would be a currency free of commissions and taxes and an alternative to the strongest currencies in the world.

(See: CryptoZoo: Cryptocurrency game that lost millions of dollars.)

Almost five decades later, this technological development experienced its worst year in 2022 and is also criticized for the high use of electricity in the mining or production process. cryptocurrency, for its use in illicit trade and extortion payments; the loss of decentralization while the difficulty of mining increases, scams that take advantage of new users interested in acquiring that cryptoactive and financial speculation.

users, analysts and academics consulted gave their opinions on bitcoin and cryptocurrencies, that only in 2022 they lost 51% of their price, although compared to their highest value on November 9, 2021 (14 months ago) 72% has devalued.

The mere drop in price generates losses for those who liquidate their positions if they had bought at a higher price, but there have also been losses at the international level due to fraud committed by operators of platforms that receive resources or manage bitcoins of those who are attracted by valuations.

To Edgar Jiménez, Professor of Finance at the Jorge Tadeo Lozano University, A good part of the problems that cryptocurrency faced last year was due to the unscrupulous management of large players in some countries who managed the resources of thousands of people who had entered into this activity.

(See: FTX founder started blog to defend himself against fraud accusations.)

The academic considers it key to educate yourself financially, verify who the resources are delivered to and warns that to enter the world of cryptocurrencies, even if the person is not an engineer “you have to know code and programming language. It is not just hearing that this activity is good and going in to buy, but finding out before doing so”.

Jiménez also says that apart from the lack of confidence that market was affected by the outlook of high interest rates.

And he adds that given the low prices of bitcoin, some investors are re-entering “although without risking resources that are needed to live since this business has a risk because it is something that is growing and evolving”.

The economics teacher Beethoven Herrera Valencia He said that the crypto ecosystem has become a financial intermediation system, the same thing that it was supposed to replace and while the Government supervises the banks, regulates risks and establishes deposit insurance, the cryptocurrency sector operates largely without supervision or guarantees savings protection.

Although it clarifies that central banks must create their own digital currency and modernize as they could eventually lose control with private currencies. He also believes that there will be cryptocurrencies working in an ecosystem “with people, but not in a massive way. People notice the lying down and they will not enter”.

(See: Another Crypto Mogul Accused of Fraud: Celsius Creator Sued.)

Felipe Montes, co-founder of Kravata, Technology infrastructure company Crypto-as-a-service, said the rate hike affected investment in risky assets, including cryptocurrencies whose total market value fell from $2.3 trillion to $850 billion.

He assured that forbankruptcies and fraud In the sector, the volume traded fell by more than 60% and the crypto businesses focused mainly on offering conversion between money and stable cryptocurrencies equivalent to 1 dollar such as USDC, USDT and BUSD to promote savings in dollars, credits, or expedite remittances. while centralized businesses like exchanges beefed up their proof-of-reserve systems to give users peace of mind.

(See: Lessons that the FTX case leaves for the crypto ecosystem in Colombia).

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