Bitcoin reached an all-time high of $41,000 this week, the latest milestone in what has been a highly successful month for the leading cryptocurrency.
But what does this mean for Malta – a country that has positioned itself at the forefront of the blockchain and cryptocurrency fields?
Lovin Malta spoke to some industry experts in blockchain and cryptocurrency to help explain why Bitcoin is skyrocketing and what it means to the country’s blockchain and crypto industries.
Jonathan Galea, a lawyer by profession, is the Chief Executive Officer of BCA Solutions, a crypto regulation service provider in Malta.
“The current spike in price has been fuelled by various institutional investors,” he said.
“Banks and investment funds have their eyes set on the crypto industry, it’s not just retail investors purely.”
“There’s also the fact that there seems to be some correlation between other markets including gold and the stock market, which is at an all time high as well,” he said.
If taken seriously, Bitcoin could be considered a safe-haven asset, just like gold, and an investment that can hedge against inflation.
“So far the surge in the price is well backed by the volume, it could be that we haven’t seen the all-time high,” Galea continued.
Some Wall Street companies have even predicted that Bitcoin could hit $146,000.
As always, the crypto market is considered volatile and Bitcoin could very well crash at any moment. However, for Malta, the current surge shows some promise for a bright crypto and blockchain future.
“Last time there was a bull market run, there was a lot of interest in the [blockchain] industry itself by service providers and exchange providers.”
“Companies that have not yet established themselves in a jurisdiction would be interested in setting up in Malta, given that it is one of the primary countries to regulate the industry,” he ended.
Alexandre Dreyfus is the Chief Executive Office of Socios.com, a leading Fintech and Fan Engagement platform operating in the sports industry.
“It’s both expected and unexpected in a way that there are global reasons that give the currency more confidence,” he said in response to the surge in the price of Bitcoin.
“Bitcoin has shown that what happened three years ago wasn’t just a bubble, but that it is here to stay whatever the price may be.”
In 2017, Bitcoin climbed to a peak of $19,783.
In March 2020, Bitcoin stooped as low as$5,000. Less than a month ago, Bitcoin broke the $20,000 mark for the first time ever.
But a recent rally has seen the cryptocurrency skyrocket to unprecedented levels determined by a number of exogenous factors including the rise in inflation which has turned many towards buying the digital currency to hedge against the rise in price level.
“The price will drop and rise, it depends on the people and their understanding of the Bitcoin and the message behind it, the freedom it gives for you to be independent,” he said in response to speculations that the coin’s surge could crash at any moment.
When it comes to Bitcoin’s impact on Malta’s blockchain industry, Dreyfus believes it’s minimal.
“The blockchain industry in Malta is small, [Bitcoin] will help consolidate it but the reality is that it went up to $41,000 not because of regulations that happened in Europe but what is happening in Asia and elsewhere,” he ended.
David Schranz is the founder and Chief Executive Officer of Dakar Software Systems and Ledger Projects, the latter being a company in the distributed ledger technology field.
“We don’t think it’s a surprise for us, whenever there is a crisis people look at crypto as an alternative,” he said in response to Bitcoin’s surge.
“It was understandable and acceptable. The reality is that it’s a usable currency and when there’s investments, they’re big investments,” he continued.
Some industry experts have Bitcoin crashing any minute, others have it skyrocketing for years to come.
“As long as everyone is invested in it, it’s going to keep on increasing. You can’t tell really but it never went down to zero, it has kept its value,” he continued.
Like Dreyfus, Schranz doesn’t believe Bitcoin’s great numbers will have an impact on the local blockchain industry.
“There’s always been an interest in blockchain, I don’t think anyone has cracked the right industry yet, there are a lot of applications that haven’t been used.”
“Blockchain is the backbone of the Bitcoin technology, the reliability and security of the platform is there,” he ended.
What do you make of the rise in Bitcoin’s value? Let us know below