Bitcoin is said to be real but still is in a bubble – financial experts say. It is said to be not a currency that CEOs would be using for multibillion dollar businesses. It’s something that people are curious about and are very open to but have not found a way to fully integrate it into their businesses.
Bitcoin hit an all-time high on Sunday, breaking above the $8,000 mark for the first time ever. The price of the cryptocurrency is up over 700 percent this year. The rapid rise of bitcoin has sparked fierce debate over the future of the digital currency.
Warren Buffet – Not Convinced and Unimpressed with Bitcoin
Even Warren Buffet seems to be not impressed at all with the king of digital currencies. Buffett also reportedly addressed the growing hype over initial coin offerings (ICOs), fundraising events through which blockchain startups can crowdfund projects by selling their users crypto tokens that could represent any number of things, ranging from access to a product or service to an entitlement to a percentage of a platform’s profits.
This skeptical stance on cryptocurrency is consistent with past statements Buffett has made about bitcoin. Several years ago, he called it a “mirage”, arguing that it was a “joke” to assign a value to something just because it can be used to transmit money.
Cryptocurrencies are not tangible investments. They don’t generate earnings or pay dividends. How do you really value them if they have no intrinsic or “book” value? And people who buy bitcoin are simply betting that the price will go up.
While I’ve always argued that there’s a place for cryptos in modern finance — governments shouldn’t have a monopoly on mediums of exchange. People need a refined understanding of whether computer code is equal to or is a suitable replacement for hard currencies. For one, it’s not at all regulated. Anything unregulated can go haywire after sometime.
The one powerful factor about currencies — and even gold — is that there’s a finite amount of it. Well, that’s mostly true, until governments start printing money, which begets inflation in many cases.
There’s also said to be a finite amount of Bitcoin, although we still don’t know much its mysterious creator. While the technologists may understand the mechanics of how new Bitcoin is mined, many folks now speculating on the currency don’t know and don’t care. That’s troubling. Yet Buffett has a real concern. If you don’t know what goes into something, meaning a lack of transparency, it can be snake oil.
Bitcoin Becomes More Resilient Amidst Negative Publicity
However, bitcoin appears to have shrugged off the negative noises and has benefitted from some positive news that could help bring it into the mainstream. Earlier this year for example, Japan passed a law to allow retailers to accept bitcoin as payment. And the CME Group announced plans to introduce bitcoin futures, sparking hope that this could bring more institutional investors into the fold.
Bitcoin is an extremely volatile asset and though it is had a huge rally this year, there has been wild swings along the way.