Ban crypto and its parasitic thievery before it is too late
https://www.telegraph.co.uk/business/2023/01/21/ban-crypto-parasitic-thievery-late/
Bitcoin is a ‘hyped-up fraud’, says JP Morgan chief
https://www.telegraph.co.uk/business/2023/01/19/bitcoin-hyped-up-fraud-says-jp-morgan-chief/
Is Bitcoin Replacing Gold? Maybe It’s Exactly the Opposite.
https://www.nytimes.com/2023/01/20/opinion/bitcoin-gold-inflation.html
My take from May 2021:
Digital gold: Is Bitcoin the future of money?
https://thehill.com/opinion/finance/554998-is-bitcoin-the-future-of-money/
Meanwhile, Bitcoin has no intrinsic value and its supply is inelastic. It is not recognized as legal tender by major governments and no central bank will provide a backstop to cryptocurrency-oriented institutions. Furthermore, cryptocurrencies are unlikely to play the role of a widely accepted medium of exchange or act as a unit of account given their tremendous day-to-day volatility. The fact that significant market turbulence can be generated by random tweets from a celebrity entrepreneur highlights the inaptness of using Bitcoin or other cryptocurrencies for undertaking day-to-day transactions.
Costly and energy-intensive mining and transaction verification processes also reduce the attractiveness of cryptocurrencies like Bitcoin. Furthermore, Bitcoin’s popularity among those involved in illegal activities will generate regulatory scrutiny and negate its anonymity advantage. Looking ahead, state-supported central bank digital currencies are more likely to become the future of money.
If not the future of money, can we make a case for Bitcoin as digital gold? Proponents argue that since Bitcoin, by design, is limited to a maximum of 21 million units, it can act as a stable store of value. Given its short history and its intangible nature, it is unclear that Bitcoin offers a true alternative to traditional gold. Gold has a long history as a medium of exchange, and the yellow metal has impressive physical properties that have caused humans to value it highly for thousands of years. Even today, many societies widely use gold for jewelry and ceremonial purposes. Additionally, from a financial standpoint, Bitcoin is currently too correlated with risky assets to act as an effective inflation hedge.
At present, Bitcoin and other cryptocurrencies appear to primarily function as speculative assets whose fluctuating valuations may be driven by financial mania or a form of contagious narrative. Central bank liquidity injections, massive fiscal transfers, rise of a new generation of retail investors utilizing online platforms (like Reddit) to coordinate their actions and the emergence of zero-commission online trading platforms (like Robinhood) have created a speculative frenzy.
https://www.telegraph.co.uk/business/2023/01/21/ban-crypto-parasitic-thievery-late/
https://www.telegraph.co.uk/business/2023/01/19/bitcoin-hyped-up-fraud-says-jp-morgan-chief/
https://www.nytimes.com/2023/01/20/opinion/bitcoin-gold-inflation.html
Digital gold: Is Bitcoin the future of money?
https://thehill.com/opinion/finance/554998-is-bitcoin-the-future-of-money/
Meanwhile, Bitcoin has no intrinsic value and its supply is inelastic. It is not recognized as legal tender by major governments and no central bank will provide a backstop to cryptocurrency-oriented institutions. Furthermore, cryptocurrencies are unlikely to play the role of a widely accepted medium of exchange or act as a unit of account given their tremendous day-to-day volatility. The fact that significant market turbulence can be generated by random tweets from a celebrity entrepreneur highlights the inaptness of using Bitcoin or other cryptocurrencies for undertaking day-to-day transactions.
Costly and energy-intensive mining and transaction verification processes also reduce the attractiveness of cryptocurrencies like Bitcoin. Furthermore, Bitcoin’s popularity among those involved in illegal activities will generate regulatory scrutiny and negate its anonymity advantage. Looking ahead, state-supported central bank digital currencies are more likely to become the future of money.
If not the future of money, can we make a case for Bitcoin as digital gold? Proponents argue that since Bitcoin, by design, is limited to a maximum of 21 million units, it can act as a stable store of value. Given its short history and its intangible nature, it is unclear that Bitcoin offers a true alternative to traditional gold. Gold has a long history as a medium of exchange, and the yellow metal has impressive physical properties that have caused humans to value it highly for thousands of years. Even today, many societies widely use gold for jewelry and ceremonial purposes. Additionally, from a financial standpoint, Bitcoin is currently too correlated with risky assets to act as an effective inflation hedge.
At present, Bitcoin and other cryptocurrencies appear to primarily function as speculative assets whose fluctuating valuations may be driven by financial mania or a form of contagious narrative. Central bank liquidity injections, massive fiscal transfers, rise of a new generation of retail investors utilizing online platforms (like Reddit) to coordinate their actions and the emergence of zero-commission online trading platforms (like Robinhood) have created a speculative frenzy.