Think bitcoins are evil

Crypto professor declares: "Bitcoin will never fall below $ 20,000 again"

Bitcoin keeps the financial world in suspense with its volatile price development. Crypto professor Philipp Sandner explains why Bitcoin will never disappear again - and what that means for our financial system.

From the dirty corner to the new gold candidate: The crypto currency Bitcoin has been booming since the Corona crisis and is enjoying growing popularity with large investors.

For example, the payment service provider PayPal has recently started offering the purchase, sale and storage of Bitcoin and other cryptocurrencies. The investment company Blackrock is planning a fund with Bitcoin and the credit card providers Visa and Mastercard are also becoming more and more open to payments with cryptocurrencies.

The Bitcoin price has skyrocketed in the past few months. (Source: t-online / Heike Aßmann)

Is Bitcoin now ushering in the financial revolution? t-online asked Philipp Sandner, blockchain professor and member of the Fintech Council of the Ministry of Finance, whether we will soon all only pay with Bitcoin, where the hype will end and whether the classic bank has had its day.

t-online: Mr. Sandner, when will the Bitcoin bubble burst?

Philipp Sandner: In order to know that, we would first have to clarify whether it is actually a question. I believe there is no Bitcoin bubble, at least not permanently. As a result, nothing bursts. But of course the price development has always been very volatile, as is the case with other commodities or stocks.

What makes you so sure? The courses finally fell sharply again in the last few days after a high-altitude flight.

To do this, I have to go back a little and try to create a picture. Bitcoin is a new digital raw material. Its properties are similar to chemical elements that researchers have discovered over the past decades, such as boron or palladium. In the beginning, people didn't even know what to do with it. Gradually they understood the raw material and realized its usefulness. Suddenly the raw material spread all over the world and became more and more popular. It will be the same with Bitcoin. But in a digital way.

Nice analogy.

Not true? And if we assume that it is true, that means: Bitcoin is at the beginning of a long journey around the world. And if that's true, its value grows in the long term. Even if it falls in the short term, the Bitcoin price will continue to rise in the coming years.

But at some point the Bitcoin rally has to end, right?

Sure, but it will take a while. The price will one day settle at a high level and then no longer crash. I would even go so far as to say: Bitcoin will never fall below $ 20,000 again.

An astronomical sum. How can a numeric code, a blockchain, be worth so much?

Objection! Bitcoin is much more than a column of numbers - only most people don't know that because they don't deal with the essence of cryptocurrency. Just take the most important characteristic of Bitcoin, its limited amount. As soon as 21 million bitcoins have been mined, it's over. From this point in time at the latest, Bitcoin is like gold or other scarce resources: Its value is determined by supply and demand and by people's belief in them. And that's there.

Philipp Sandner heads the Frankfurt School Blockchain Center (FSBC) at the Frankfurt School of Finance & Management and has been on the FinTech Council of the Ministry of Finance since 2017. His areas of expertise are the crypto currencies Bitcoin and Ethereum, the digital euro, tokenization of rights and assets and the area of ​​digital identity.

So you would say that it is still worth investing in Bitcoin at the highest prices, even now?

Everyone has to decide for themselves. Personally, however, I am of the opinion that Bitcoin still has great potential to increase. Of course, a Bitcoin investment can therefore be worthwhile.

Anyone who owns Bitcoins can do practically nothing with digital coins. Hardly any business accepts "currency" as a means of payment. Isn't that a problem?

Right. Cryptocurrencies have not yet established themselves as a means of payment or exchange. Firstly, that will change and secondly, Bitcoin already fulfills another monetary function, namely that of storing value, protecting against inflation.

Philipp Sandner: The economist is a blockchain professor at the Frankfurt School of Finance and Management. (Source: Frankfurt School of Finance and Management)

Which brings us back to the comparison of raw materials, the "digital gold". Will Bitcoin establish itself permanently as an asset class?

Assuredly. But: Bitcoin is not yet digital gold. Because gold has been known for thousands of years - among all seven billion people. Bitcoin has not yet reached this level of widespread use. In addition to Bitcoin, there are numerous other cryptocurrencies.

Assets is an umbrella term for various asset classes, such as commodities, bonds, funds or stocks.

When will they overtake Bitcoin - and which currency are you thinking of?

Not at all. Something like Bitcoin happens once every few decades in human history. No matter how great a cryptocurrency you can bring to market - it is impossible to achieve the success of Bitcoin in the short term or even to catch up.


Because the Bitcoin is the first of its kind. There are more than 4,000 cryptocurrencies, but Bitcoin and Ethereum - the second most important cryptocurrency - together make up about 80 percent of the market. What happens in places three to 4,000 is therefore uninteresting. Or to put it another way: There will be no Bitcoin 2.0.

But other currencies such as Litecoin are much easier to mine and use as a means of payment.

Might be. But why don't we talk about Litecoin for half an hour? An innovation that should spread is a mix of technology and marketing. When you set up a new, good technology, it doesn't mean anything at first. Because: The news content is no longer there, the message no longer gets caught in people's heads. New coins - even if they are technically better - will therefore find it extremely difficult to overtake Bitcoin as the industry leader.

"Mining", in German "digging", describes the process of creating a coin in the crypto scene. In order to mine a bitcoin, for example, a user's computer has to solve a complicated arithmetic problem.

Cryptocurrencies are still more of a niche topic, but experts like you believe that they will be a revolution. Is the rise of cryptocurrencies really comparable to the development of the internet?

Yes, blockchain technology is definitely comparable to the advent of the internet. We used to send each other postcards - today we take a photo and send it to ten people at the same time via WhatsApp in seconds. And for free. There you see the digitalization revolution like in a picture book. It will be the same with cryptocurrencies, especially in the financial world.

How exactly do you mean that?

Cryptocurrencies will completely turn the financial system upside down. I firmly believe that blockchain technology is the basis for the infrastructure of the future. Sooner or later every asset - stocks, bonds, commodities - will be mapped on a blockchain basis, keyword tokenization.

That was a little quick now. Could you please explain that in more detail?

Of course. The background for what I have touched on is the crypto currency Ethereum. What is meant is less a currency than an entire ecosystem: Unlike Bitcoin, Ethereum can be used to conclude contracts transparently, among other things. This way you can build all possible assets on Ethereum and certify economic transactions and contracts. In a sense, Ethereum is a second digital raw material. To stay in the picture, if Bitcoin is digital gold, Ethereum is digital oil. Both are not comparable with each other. They do not replace each other, but rather are complementary to each other.

Sounds like everyone who takes part will become tomorrow's winner. Who are the losers in this blockchain revolution?

All companies that don't take digitization and crypto seriously. Whoever does the opposite is actually one of the winners. Take a company like Coinbase, where you can store and trade your cryptocurrency. Coinbase has managed to come to a valuation of nearly $ 80 billion in just a few years. That is almost twice as much as Deutsche Börse.

Good cue! A blockchain is open 24 hours, Coinbase too. Who actually needs institutions like the classic stock exchange with annoying closing times?

Justified question: I would agree with you about the stock market, because one day the conventional stock market might really no longer need it. The situation is different with banks: of course, you can theoretically store Bitcoins yourself. But you need technical knowledge, otherwise someone will steal the bitcoins from your cell phone or hard drive and you won't even notice. This is exactly the role of the bank, as the bank is able to take care of assets like no other.

Thank you for talking to us, Mr. Sandner.

more on the subject

  • Subjects:
  • Finances,
  • Money,
  • Investment,
  • Bitcoins,
  • Blockchain,
  • Raw materials,
  • Digitalization,
  • PayPal,
  • Visa,
  • Corona crisis,
  • Hard disk,
  • Whatsapp,
  • Cryptocurrency