At a time when many countries of the world still view cryptocurrencies and bitcoin with suspicion and suspicion, and speculative assets in this currency - according to many economists - are described as a way for criminals and drug dealers to transfer and launder money, France organized the first and historic public auction on Monday. March 17th, to sell 611 Bitcoin units.
"The Agency for the Management and Recovery of Seized and Confiscated Assets is the one that recovered these Bitcoin units by the state that is liquidating this judicial seizure," said Jesslyn Kabandji, who organized and supervised the auction at the "Kabandji Morching" auction house, in previous media statements.
However - according to information published by the newspaper leparisien, citing numerama - the vast majority of these Bitcoins were confiscated from Frenchmen involved in the Gatehub piracy in 2019.
As for the Director General of the Agency for the Management and Recovery of Seized and Confiscated Assets, Nicolas Bessoni, he confirmed to some media outlets that “the Parisian investigating judge - as part of a judicial investigation opened by the Cybercrime Department of the Public Prosecutor's Office in Paris - entrusted us with orders issued between March and September 2020, authorizing The sale of 610 bitcoins, and another one comes from a final confiscation. "
After 611 bitcoins were recovered by the Ministry of Justice, and under the supervision of the Confiscated Assets Recovery and Management Agency, this first-of-its-kind and historic auction was organized in France, and the online sale by the "Cabandji Morching" auction house attracted more than 1,600 participants, most of them from The French, there are also Belgians and British.
Jesslyn Kabandji: The seized and confiscated asset recovery and recovery agency is the one that took these Bitcoin units back from the state that liquidates this judicial seizure (Reuters)
"We did well when we waited and took our time to prepare for the auction. When preparations began in September 2020, the price of Bitcoin was around $ 10,000, far from the $ 55,000 it made this week," the auctioneer said. At a completely different level in terms of yield.
The auction was held in two phases, with 437 contracts from 0.11 to 2 BTC in the morning, and then 42 contracts from 5 to 20 BTC in the afternoon.
Bidding for the first units began at nine in the morning, and most of them were sold by midday for 40,000 euros per bitcoin, a price close to the global market price of $ 55,000 per currency.
By the end of the afternoon, the cumulative bid amounted to 24 million euros, or 27.4 million euros, plus fees.
And "which corresponds to the market price of Bitcoin", according to Kabandji, who added that "everything went well ... We have registered more than 100 successful bidders, but it must be said that there were 6 of the big buyers who accumulated several Contracts ... and after the sale, we will transfer the Bitcoins to buyers' accounts. "
While the proceeds of the sale - excluding commission from the auction house - will go to the French state budget, potential victims or charitable organizations.
According to the Seized and Confiscated Assets Management and Recovery Agency, this first auction will be followed by other auctions in the future, as the agency expects to collect more Bitcoins from the pockets of criminals.
Camille Al-Sarri: One of the biggest problems with this digital currency is that it does not have a physical bond on the ground (Al-Jazeera)
How was Bitcoin born and when did it appear?
Perhaps one of the first obvious questions is: How was this cryptocurrency born?
Where is its value derived?
What is the secret of the increase in its assets and their crazy value every day?
We took these questions to the academic researcher and economist Kamil Al-Sari, who told Al-Jazeera Net, "In the beginning, it is necessary to verify that this digital currency is a diversified and multiple currency, and there is no single type of these currencies, but of course there are known types that exchange and have a reputation, and the most famous of course. Bitcoin and other unknown types. "
The fact that Bitcoin is a strange currency and it is not known where it came from the first time, but it is said that the person behind it is Japanese, but we do not know anything about it, and it is said that it is a pseudonym.
But this digital currency is quantitatively limited, and this gives it room for maneuver and speculation, which gives it momentum, greater value and insane height.
Whereas, if this currency were present and exchanged naturally and sufficiently available in terms of quantity, its value would be moderate and normal.
On the other hand, this currency is the result of electronic means or the so-called electronic ground, and therefore it is monitored and controlled remotely, and no human being can enter it without supervision.
"Perhaps one of the biggest problems of this digital currency is that it does not have a physical bond on the ground. Every currency has a value and a material bond, for example the dollar currency has a realistic physical bond, which is the strong American economy that has all the elements of the guarantee for the dollar currency, when we buy a certain amount," Al-Sarri added. We buy part of the US economy from dollars, and in addition to that there is the US Central Bank’s guarantee that gives this currency its real value, and therefore no one can say that the dollar’s currency has no value on the ground.
He adds, "Contrary to all of this, Bitcoin digital currency does not have a real value, or what I call the inward value. For example, gold has an inward value, and therefore all countries maintain a certain stock of gold, because it remains the last resort in crises, and in the event that all economies collapse, it remains." Gold stocks are the only guarantor. Just as families buy gold and keep it for times of crisis. "
Hence the importance of the real esoteric value of real currencies, unlike Bitcoin digital currency.
But why is there such a great demand and speculation for Bitcoin and digital currencies? It is a policy of supply and demand, according to the same speaker.
Hence, we can explain that the great rise of Bitcoin is due to the large global demand for it, in contrast to the limited supply and quantity of this currency offered in the market.
Invested companies
Regarding the most important companies behind Bitcoin and the digital currency, economist Kamil Al-Sarri stressed that Bitcoin is the currency of all companies that do not have assets on the ground, and do not have a clear and transparent economy.
"According to my opinion, this currency remains the currency of drug traffickers, prostitutes, terrorists and wealthy people who do not want to disclose the source of their wealth. Therefore, most of those who have suspicious, undeclared and unofficial activities trade in Bitcoin," he said.
As for the researcher specializing in financial markets and economist, Daniel Melhem, he told Al Jazeera Net, "There are two types of companies that invest in Bitcoin. Investment companies or hedge funds (speculation) such as BlackRock, Goldman Sachs and others, which were found in This financial derivative is an opportunity to achieve important returns, taking advantage of the flooding of the markets in cash by central banks and industrial companies such as Tesla, and it is possible for Apple technology and other companies that found in this currency an opportunity that is not its primary goal. Investing, but protecting its cash assets from the risk of inflation, because Bitcoin is the only currency that does not include inflation, also to benefit from reducing the cost and duration of remittances. There are financial technology companies such as PayPal and Visa that found Bitcoin an opportunity for renewal. And increasing its supply of financial services, thus increasing its financial returns. "
The European Union and the European Central Bank are seriously considering creating a strong digital currency (Reuters)
An official position warned against cryptocurrencies
And whether the organized auction in France was an official recognition by the authorities there of these currencies, Melhem asserted that "the sale of assets in the public auction in France does not mean official recognition by the French financial authorities, led by the French Central Bank. This process does not go beyond selling assets. Unusual at auction. "
He added, "The recognition of Bitcoin as an official currency comes from the French Central Bank or the European Central Bank, knowing that the French Financial Market Supervision Department has made it possible to deal with financial derivatives of digital currencies, including Bitcoin. I think it is too early to talk about official recognition, given the sharp fluctuations in the prices of this currency, which raises Risks in the short and long terms. "
Regarding the presence of official statistics on the volume of circulation of these cryptocurrencies in France, and the official French and European position on the circulation of these currencies, economist Camille Al-Sarri said, "In fact, we do not have any accurate statistics regarding these currencies, because they do not have real data and figures on the ground, and they do not have them." A specific position is like the currencies traded on global stock exchanges. "
He added, "I think that the official French and European position will always remain cautious towards these currencies. But what I can confirm is that the European Union and the European Central Bank are seriously considering creating a strong digital currency."
Melhem: Since the European Central Bank did not recognize digital currencies, the deal will remain on the basis that they are financial derivatives, not a digital currency (Al-Jazeera)
As for the future of digital currencies and Bitcoin in France and Europe, especially after a petition was recently launched on the Senate website to change the texts and allow the Bank of France to buy and invest in cryptocurrencies, analyst and economist Daniel Melhem indicated that as long as the European Central Bank did not recognize digital currencies Like Bitcoin, an official currency, it will remain dealt with only on the private investment level through companies or hedge funds, meaning that the deal will remain on the basis that it is a financial derivative and not a digital currency.
As for Dr. Camille Al-Sarri, he explained to Al-Jazeera Net that "there are no authorities that defend this currency as is the case with other currencies, such as the euro that is defended by the European Central Bank, and the dollar that the US Central Bank defends, while there is no central bank that defends Bitcoin in If it collapses, and here lies the weakness and danger of this currency for any investor. "
He concluded by saying, "This pragmatic step on the part of the French state is merely for a real benefit, as if the French authorities say: Whoever wants to use this currency and speculate with it is free, and speculators can use it legally, but the state does not protect the speculators from collapse and does not bear the loss in the event. What happened. "
Market watchers expect the digital currency to rise to $ 100,000 by the end of 2021 (Getty Images)
Significant risks of the cryptocurrency
And about the danger of digital speculation and dealing with these cryptocurrencies, and the description that we can give to this speculative market, and are we facing a parallel market and economy?
What is the accurate scientific description?
Melhem said, "Since cyberspace has gone beyond the state’s limitations to become a global concept, I believe that digital currencies and the technology based on them are the future of domestic and international economic and trade relations, especially if countries adopt this technology and issue their own currencies. Thus, the new global economic and trade system can adopt currencies." Public and private, and for Bitcoin to become an Arbitrage like gold. "
And Melhem added that while waiting for this moment and step, the current digital currencies remain numerous risks threatening their existence, including global monetary policies.
As global monetary policies flood the markets with cash that benefits investment banks and investment funds that often look for large returns, digital currencies find their way, as well as sharp fluctuations in prices that often exceed 100% annually.
These risks, as well as give important returns, are able to inflict tremendous losses on the bearer.
And also there are operational risks, as any malfunction in the algorithms that underpin the currency, or if the owner of the currency forgets his account password, then he loses his digital money, in addition to the risk of digital piracy that threatens deposits.
Melhem concludes that digital currencies, as well as their advantages, also have many risks. It is too early to decide on their future in light of the current circumstances despite their importance, especially with the absence of radical solutions to some of the existential risks of these currencies.