The past few months have been a rough one for bitcoin and other cryptocurrencies,
however earlier this year bitcoin and other cryptocurrencies experienced a bullish
market resulting in bitcoin hitting it’s all time high mid April, since then the world’s
most popular cryptocurrency has lost more than 40% of it’s value. Nevertheless,
some experts believe that bitcoin and other cryptocurrencies will again rise to
prominence, why others think it does not meet the test for a currency and has no
With the controversies surrounding bitcoin and other cryptocurrency, some experts
do believe in bitcoin. However you might be tempted to ask “why some money
experts believe in bitcoin” that they can’t imagine a future with bitcoin and strongly
believe that bitcoin will rise to prominence. Well, cryptocurrencies has made a lot of
financial transactions easier, it’s privacy is one of it’s major advantage over
traditional financial transactions.
According to James Page, a technical writer and executive Cryptohead “Bitcoin is
definitely a good investment, bitcoin payments are not only cost effective, but you
don’t lose money on exchange rates, like on a regular currency. Another benefit is
that it isn’t regulated by any central authority or bank, which gives all the power to
bitcoin users and miners”
Why others do not believe in bitcoin and other cryptocurrencies
Despite all of the media attention that cryptocurrencies have had over the years, the size of the market is still minuscule compared to fiat currencies. This relatively small market size means that smaller forces can have a larger effect on price. Bitcoin and other cryptocurrencies are well known for their volatility, earlier this year reaching it’s all time high. However, the past few weeks has been a wild ride for the cryptocurrency investors. Although bitcoin and other cryptocurrencies are gradually gaining momentum after it’s sudden crash in May this year, some still believe bitcoin to be a bubble and has no intrinsic value and hence would loose relevance with time. Billionaire, Warren Buffet called it a mirage stating that ” It does not meet the test of a currency,” on CNBC in 2014. “It is not a durable means of exchange, it’s not a store of value.”
Also, some experts believe bitcoins decentralized nature and anonymity in making payments promotes fraud and other illegal activities. Berkshire vice-chairman Chalie Munger said in a Q&A session ” I don’t welcome a currency that’s so useful to kidnappers and extortionists”. Hence indicating that the development of bitcoin and other cryptocurrency promotes kidnapping and extortion and is contrary to the interest of civilization.
However, amidst all the controversy of the credibility of bitcoin and other cryptocurrencies, i think it has it’s potentials and pitfalls as an asset class. But on a positive note it can function like traditional currencies to facilitate payment around the world in a more cheaper, faster and secure way than other forms of payment.