The cryptocurrencies have experienced a boom in recent months drivenin addition to the COVID-19 pandemic, by certain billionaire figures -such as Elon Musk- and governments that have chosen to give them a boost as legal tender.
Given this scenario, more and more people are choosing to enter the world of cryptocurrencies in the hope of having a medium and long-term investment, despite the volatility that characterizes them.
Here we bring you the price of the main cryptocurrencies for this May 7, 2022:
What are cryptocurrencies and how do they work?
A cryptocurrency or cryptocurrency it is a digital medium of exchange (does not physically exist) which is based on cryptography to ensure the integrity of transactions and maintains control over the creation of new units.
The first cryptocurrency to be born was bitcoin.in 2009 and since then others equally known as litecoin, ethereum, bitcoin cash, ripple, dogecoin, among others.
Cryptocurrencies have various characteristics that make them unique, such as the not be regulated or controlled by any institutionthey do not require intermediaries in transactions and accounting blocks are used to prevent new cryptocurrencies from being created illegally.
However, by not having regulators such as a central bank or similar entities, they are pointed out not being reliable, being volatile, promoting fraud, not having a legal framework that supports its users, allowing the operation of illegal activitiesamong others.
To acquire them, you can buy or exchange the currency itself in specialized portals. Its value varies depending on the supply, demand and commitment of usersso it can change faster than traditional money, but the more people are interested and want to buy a given currency, the higher its price.
However, whoever invests in this type of digital assets must be very clear that this form brings with it a high risk to capitalWell, just as there may be an increase, there may also be an unexpected crash and end the savings of its users.
The bitcoin boom
Born after the financial crisis of 2008, bitcoin promoted a libertarian ideal and aimed to put traditional monetary and financial institutions in check. It was devised by someone named Satoshi Nakamoto, but today his identity remains hidden.
According to a book published by Satoshi Nakamoto, the purpose of cryptocurrency was “make online payments directly from one third party to another without going through a financial institution”.
This is how on January 3, 2009, he created the first block of 50 bitcoins. Currently, there are 21 million bitcoins in circulation and the monetary mass does not stop increasing with the continuous emission of new units.
In 2013, this cryptocurrency, which was worth almost nothing in its early days, surpassed $1,000 and began to attract the attention of financial institutions. Months later, he faced his major crisis with the hacking of the MtGox platform directed by Mark Karpelès, where up to 80% of the units in circulation were exchanged.
Prices fell and it took three years for the cryptocurrency to recover. At the end of 2017, a new rally placed its value at $19,511. Today its price has exceeded 62 thousand or fallen to 35 thousand, also influenced by comments from investors like Elon Musk.
Despite the progress and scope that Bitcoin and other digital assets have had, organizations such as the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) are still skeptical about the possible benefits of this type of cryptocurrency.
Others, like the government of The Saviorhas given him his vote of confidence and on June 9, 2021 became the first country to legalize bitcoin as legal tender. In addition, President Nayib Bukele announced his intention to create the first Bitcoin City in Conchagua and it would be financed through tokenized bitcoin-backed bonds.
Cryptocurrencies in Argentina: Despite the fact that digital currencies have not been legalized in Argentina, their popularity has been increasing after decades of financial instability that citizens have had to face, becoming one of the Latin American nations with the greatest presence of cryptocurrencies. Along this line, President Alberto Fernández has suggested its use to combat inflation.
In addition to bitcoin, another of the most popular cryptocurrencies is LUNA, a token that is traded on the Terra system and can be purchased from the Tienda Crypto platform. This cryptocurrency has managed to have a historical maximum of up to 119.18 dollars.
Cryptocurrencies in Mexico: The Bank of Mexico (Banxico) has determined that none of the institutions that participate in the national financial system may use or must allow operations of any kind through this means of payment. However, the country ranks 14th out of 27 nations that own digital currencies, surpassing Venezuela and Colombia, with around 13 million users in 2021, according to a Finder study.
Cryptocurrencies in Peru: The Central Reserve Bank of Peru (BCR) has made it clear that its mission is not to be the first or the second central bank to regulate the use of cryptocurrencies, due to the instability that characterizes them. However, days ago the president of the (BCR) assured that the BCR was working on its own digital currency project.
Cryptocurrencies in Colombia: In the South American nation there are more than 500 sites where it is allowed to pay with cryptocurrencies. In December 2021, it became the third country in the world with the highest growth of bitcoin owners, only surpassed by Russia and Norway, according to Finder.
Cryptocurrencies, an alternative in the conflict between Russia and Ukraine?
As the Russian invasion of Ukraine tensions have also grown in the financial markets, where neither cryptocurrencies have managed to escape the effects that have led them to have mixed behavior in recent days.
Behind the wave of economic sanctions against the regime of Vladimir Putin, there are several bets that Russia will use these digital currencies to cope with punishment.
As a result of the Russian-Ukrainian conflict, the purchase of cryptocurrencies in rubles has skyrocketed, reaching all-time highs. Just bitcoin has registered increases of 15% with a value of up to 44 thousand dollarsthis in a context in which the convenience of a currency not regulated by any body is being evaluated.
And it is that recently Russia and its main financial institutions have suffered the attacks of the exclusion from the SWIFT interbank systemthis added to the Recent Russian Currency Crashes Keeping Russian Citizens Nervous and the asset freezes imposed by the European Union and the United States.
Given this scenario, the Russians have turned to cryptocurrencies, following the example of other nations such as North Korea and Iran, but they do not only resort to Bitcoin, but also to Tether. However, others such as Coinbase, Binance and FTX have chosen to turn their backs on the country and collaborate with the United States instead.
The use of cryptocurrencies has not been limited to Russia either, since the Ukrainian government has also received up to $17.1 million in these digital currenciesaccording to an analysis by Elliptic.
However, just as the cryptocurrencies have had rises, the great speculation that is currently in the markets has caused it to also have significant crashes such as the -8.5% of Bitcoin, -12% of Ethereumas well as further downgrades from XRP, Cardano, and Solana, further confirming their risky status.
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