Bitcoin (BTC) and other cryptocurrency prices have soared in the previous year, causing an increase in popularity in the crypto industry, triggering investors to rush in on all the rage.
Bitcoin (BTC) has had a transformative year, trending now at just below $60k compared to $20k from the year before. While the market has taken a breather for now, the majority of investors being bullish expect the price of Bitcoin (BTC) and other digital currencies to soar yet again.
However, before the upcoming price increase is to officially commence, which will further increase the $3 trillion market cap of the crypto market from merely $150 billion last year, Olaf Scholz, the new German Chancellor cautioned about the “tulip” bubble emerging in the cryptocurrency market and the state must have control of the currency monopoly to keep it from happening.
According to Reuters, Chancellor Scholz argued in 2018 that “I would doubt whether [bitcoin and cryptocurrencies have] any prospects as a currency model.” Scholz alluded to the speculated tulip bubble that started in Amsterdam in the 17th century when he said that the risks of the tulip inflation of cryptocurrencies are quite significant.
The new Chancellor also warned against Bitcoin (BTC) mining and the large energy consumption amounts to sustain its network due to his plans to accelerate the green economy transition in Germany.
According to the University of Cambridge Bitcoin Electricity Consumption Index, the Bitcoin (BTC) network consumes almost 200 terawatt-hours of electrical energy per year, which is equivalent to Thailand’s energy usage. Just in the beginning of November, the European Union was called by Swedish regulators to prohibit the mining of Bitcoin (BTC) and other cryptocurrencies.
Facebook’s decision to introduce a new cryptocurrency based on Bitcoin (BTC) has been slammed by Scholz by referring to “cosmetic” attempts of social media to comply with regulatory measures in regulating the cryptocurrency industry.
In expressing his strict disapproval of private cryptocurrencies, Scholz stated this time last year that “we must do everything possible to make sure the currency monopoly remains in the hands of states.”
Scholz is not the only world leader that has expressed concern over the crypto industry. Former US secretary of state Hillary Clinton said in a panel discussion in Singapore during the Bloomberg New Economy Forum a week ago that the status of the US dollar reserve currency could be compromised due to the rise of cryptocurrencies.
“What looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential for undermining currencies, for undermining the role of the dollar as the reserve currency, for destabilizing nations, perhaps starting with small ones but going much larger” argued Clinton, pointing out that more nation-states would also keep a closer eye on the recent developments in the crypto industry.
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