Bitcoin, Ethereum: Should You Be Afraid to Invest in Cryptocurrency?

About $20,000 or “only” €19,000. On Wednesday, June 22, the price of bitcoin went far, far from its high. Its valuation is no longer equivalent to even a third of what it was on November 9, 2021, when it hit its all-time high of $69,000. And the cryptocurrency queen is not the only one suffering. The value of Ethereum at just over 1,000 euros has fallen by almost 70% since the beginning of the year. Add to that the collapse of Terra Luna and its UST stablecoin, and crypto is all red.

In this context, the question arises: is the crypt dead? For Stanislas Barthélemy, a consultant at Blockchain Partner, a consulting firm affiliated with KPMG, and the first guest of the “Grand rendez-vous de l’épargne” (Capital/Radio Patrimoine), this would be a quick start. “It’s not the cryptocurrency at stake, but rather the players who have created service offerings on it that mismanage their risk,” explains the expert, explaining the cascading liquidations in the world of cryptocurrencies. “The core technology is unquestioned. We are seeing a crash because there is a paradigm shift, the macroeconomic context has worsened significantly, there is much more inflation, risky assets are under pressure,” for his part, Quentin Subrann, Capital journalist and responsible for the 21 million newsletter, second guest on our show.

>> Discover 21 Million, Capital’s Cryptocurrency Newsletter. Transcripts, tips and weekly price analysis to support you in your crypto investments

Adopt a real investment strategy

Words that are likely to reassure investors…who may still be worried that their portfolio is subject to extreme volatility. But no surprise, according to Stanislas Barthélemy, who compares cryptocurrencies, more specifically bitcoin, to “stocks on steroids.” Thus, the challenge is to focus on the medium term in order to partially neutralize the risk. Therefore, for the non-specialist who has neither the time nor the skills to manage their investments on a daily basis, the specialist recommends “move to bitcoin or ether with a 2-3 year time horizon and not look at your wallet.” Another recommendation: invest gradually to “average acquisition costs and smooth out volatility.”

Forget about the prices and volatility associated with these assets. Also forget about the qualification of digital gold attributed to bitcoin, according to which the queen of crypto will protect against inflation. A theory related to its relative rarity – no more than 21 million tokens – but undermined by recent events. “Because of this scarcity, people thought Bitcoin would be a bulwark against inflation. Except that in the last 6 months we have seen an explosion of inflation and a strong fall in bitcoin,” says Quentin Subrann.

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Our report at the blockchain school

But the understanding of cryptocurrency is not limited to price changes. It is primarily a matter of mastering the technology with which it is associated: blockchain. This is the goal of Alyra, the blockchain school that trains people for ecosystem professions. In the “Reporting” series of our program, its founder, Jeremy Vauquier, presents the various training courses provided by the school: a developer, a consultant, and a specialist in decentralized finance. As many skills as possible funded in a variety of ways, including a personal training account (CPF).

On the way to clearing the market?

And non-professional crypto investors should take the same approach. Since we need to be interested in the company whose share we are buying, it is important to understand the blockchain behind the currency. Because for our guests, only the best of them will survive, like the sanitation seen in technology stocks in the late 90s. Internet bubble in tech stocks,” says Quentin Subranne. A comparison that makes sense, according to Stanislas Barthelemy: “Most of the companies have disappeared, but the concept of the Internet has survived,” he recalls. Perhaps this is a happy omen for our investors, if, of course, we make the right choice.

Falling in love / ranting by Pierre Sabatier

Like every month, Pierre Sabatier, president of Primeview, credits his favorites with… mouths. The economist praises the yield on Italian government bonds, which is approaching 4% and, according to him, opens up great opportunities. Except, of course, for the collapse of the eurozone, a scenario he doesn’t believe in, given the stance of the European Central Bank. Under these conditions, “we find the return/risk pairing interesting,” he says.

His ranting, on the other hand, is directed at investment professionals who must change their analytics software at all costs. Because central banks have changed their discourse: they will no longer be the lifeguards of last resort. Hence the urgent need to have “new glasses”. The real challenge is to learn to identify good students and especially bad ones,” the expert pleads. Thus, active management, which has been neglected in recent years, may return.

Section “It concerns you”

In the last part of the program, the experts of the “Grand rendez-vous de l’épargne” answer your questions, as they do every month, in the “It concerns you” sequence. Stefan Absolu, deputy director of Pyxis Conseil, is thus enlightening the reader whose husband has life insurance and wants to know if he will be refunded some of this amount after their divorce.

Next, Nathalie Cusigou-Sujas, notary of Paris, explains the current rules regarding property tax (IFI) for beneficiaries of a lifetime right to housing in the main place of residence with children from different beds. Finally, Charlotte Tamer, director of consulting at Yomoni, details the different types of fees charged on life insurance contracts and retirement savings (PER) plans, with these fees to be displayed in a summary table on the website of each insurer and distributor of these from June 1, 2022. products.

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