In my article about blockchain technology and cryptocurrencies, I pointed out the possibility of causing huge price fluctuations with a manageable amount of capital. Not only are many investors investing in cryptocurrencies in the belief that they will secure their capital and make a good profit, but now states are also increasingly interested in cryptocurrencies. Why?

The following is just speculation. You don't have to think it's likely, but can you rule it out?

Not only can states juggle large amounts, they can also do so completely unnoticed due to anonymity. They could cause price fluctuations through minor manipulations and buy cryptocurrencies at favorable prices. Through various accounting tricks, these deposits would not cause any problems in the budget as official assets and would not be noticed as formal profit by booking at purchase prices (purchases are made at price A, which later increases by 100% or more, but still appears in the books at price A).

If sufficiently large amounts of cryptocurrency are controlled, several measures are initiated:

• Scarcity drives up the price very sharply in the short term.
• The state officially recognizes the cryptocurrency as convertible into regular currency.
• The state decides on a compulsory conversion of government bonds into cryptocurrency (as a state, it can do this legally) and issues the crypto coins held in exchange for the government bonds. The interest burdens on the bonds remain unaffected.
• A complete crash of the cryptocurrency is staged with the rest of the crypto holdings held.

In effect, the state would have reduced its converted public debt to the amount of outstanding interest payments.

Is that conceivable? Rising prices are always a goal for investors, especially if the pyramid scheme of cryptocurrencies is ignored. Using Bitcoin as an example: the amount of Bitcoins that could buy just 2 pizzas in 2011 is now formally worth around $450 million, just because of the price increases. From the analysis of the blockchain, it is known that around 63% of the coins are speculatively hoarded over longer periods of time. So the question again: is that conceivable?