Bitcoin: The Tulip of the Computer Age?
Unpacking the crypto hype for Rosa Luxemburg Foundation
March 16, 2023, Tunis, Tunisia: Tunisia, 16 March 2023. In this photo illustration, the Bitcoin logo and the Tether USDT
- Imago/Zuma Wire
Read full story here
In the shadow of the war in Ukraine and the central banks’ interest rate rally, sheer panic reigned in the tech and crypto sectors. The market value of Bitcoin collapsed in 2022, although it has recently recovered again. The crypto exchange FTX, which issued loans (similar to a bank) using Bitcoin as collateral, went bankrupt.
But there is no central bank to prop up Bitcoin prices in times of crisis. FTX does not even have a deposit insurance system like banks in Germany do. The good news, however, is that crypto assets probably have little connection to the traditional financial system (yet), so there is no threat of a financial system meltdown like in 2007–8 — for now.