DeutschCryptocurrencies Generally Have No Real Value
Central bank currencies such as the US dollar were previously backed by gold. Although this is generally no longer the case today, the economy of the corresponding currency area naturally represents a certain value behind the central bank money. The situation is different with cryptocurrencies, as these normally only consist of data records and transaction numbers, while there is no value or tangible asset behind them.
Digital Currency Can also Completely Lose Value
Since there is no tangible asset behind the cryptocurrencies, it can happen in the worst case that the digital currency completely loses its value. This will always be the case if there are no more traders on the buyer side who would be willing to buy the digital currency. Supply and demand play an enormous role in speculation on digital currency, which has already been shown on the market several times in the past.
Which Digital Currencies are Relatively Protected?
Basically, every cryptocurrency can also completely lose its value. From today’s perspective, this is rather unlikely for some digital currencies, as they have established themselves on the market and it is not to be assumed that demand will fall so significantly in the future that no one will want to buy these currencies anymore. In particular, the following cryptocurrencies with a broad market capitalization are comparatively stable and it is not to be assumed that they will completely lose their value in the foreseeable future:
Trust in the Digital Currency as the Basis for its Value
If you are perhaps wondering at this point what actually constitutes the value of a cryptocurrency, the answer is: the trust of traders in the corresponding currency. Almost all digital currencies are only traded because – at least the buyers – trust that they will receive real assets in return for the corresponding currency. Specifically, this means that, for example, payment can be made in online shops or even some local shops in exchange for the cryptocurrencies, so that you receive goods in return.
Provided that this trust continues to exist, a digital currency is unlikely to ever completely lose its value. However, this does not mean that there cannot be drastic price slumps and thus losses in value. The beginning of this year has already shown that things are not just going uphill, as some digital currencies have already lost over 30 percent of their value since January. Nevertheless, most cryptocurrencies are currently still significantly in the black, which is primarily due to the enormous price increases of the past year (2017).
