Yahoo Finance Will The Price Of Bitcoin Drop To Zero As Forecasted By Vanguard Economist?
Bitcoin (BTC) is the perfect example of what the cryptocurrency market can achieve and the opportunities that it offers. It was the first digital currency to be introduced and has experienced phenomenal growth especially in the past one year. However, the price has since then been dropping but Joe Davis, a senior economist at Vanguard Group believes that it will lose all its value at some point.
Davis is one of the analysts that seem to be against Bitcoin while others believe that Bitcoin will still deliver massive growth in the future. The Vanguard analyst recently stated that Bitcoin is a poor investment choice and that it is not a currency. He also added that Bitcoin’s biggest threats are the institutions that it was created to bypass. Davis believes that Bitcoin will continue to lose value and eventually its price will be Zero.
Davis argues that Bitcoin does not match the characteristics of a currency yet it is considered as one. He also feels that its extreme volatility means it is not ideal as a store of value. The analyst claims that Bitcoin also lacks the characteristics necessary for it to be matched alongside traditional investments such as stocks and bonds.
Those supporting cryptocurrencies view blockchain technology and digital currencies as alternatives to central bank systems. Davis believes that central banks will eventually come up with their own cryptocurrencies and blockchain systems which they will use to improve their financial services. Additionally, Bitcoin is being adopted in different industries for the efficiency that it provides. Decentralized technology is believed to be the real breakthrough in this narrative.
Meanwhile, Bitcoin has been widely adopted over the years and has since enjoyed massive gains. Only in the past few months has its price started dropping by huge margins leading to concerns about the future of Bitcoin and the entire cryptocurrency market in general. It is not clear whether the price will keep falling or whether it will recover.
The current situation with Bitcoin has led to a sort of dilemma, especially for cryptocurrency traders. Bitcoin has proved to be extremely volatile, thus making it less suitable as an investment. There is also the uncertainty about the future of the cryptocurrency which is also amplified by the fact that cryptocurrency is intangible and it is not backed by any physical asset.
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Another reason for bitcoin’s vagueness is that many analysts feel that Bitcoin is treated as an asset and a store of value despite it being considered as a digital currency. There is also the issue about the use of cryptocurrencies to facilitate illegal activities such as money laundering and drug trafficking which has been one of the reasons why regulatory authorities have been against cryptocurrencies.
Although Bitcoin and altcoins are considered threats to fiat currencies and the banking system, they will most likely not replace the monetary system but rather encourage upgrades and the adoption of blockchain technology.
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This article was originally posted on FX Empire
