The debate about the credibility and mainstream acceptance of cryptocurrency ever since Bitcoin rose to fame in 2017 does not seem to have any conclusion. People involved in this discussion presented valid reasons both ‘for’ and ‘against’ the credibility and acceptance of cryptocurrencies. A recent addition to this discussion was the general manager of Bank for International Settlements, Agustin Cartens, who sided with the ‘Asset’ camp.
In an interview with Dallas Fed, Cartens presented his ideas regarding cryptocurrencies and said:
“Bitcoin or Cryptocurrencies in general are interesting… the main issue I take with cryptocurrencies is the term currencies. And i think they are not currencies, they are not good store of value, they are not good medium of exchange, they are not good unit of account. I think the attempt to have them come into life as a way to substitute legal tenders and fiat currency is a failed attempt.”
Cartens supported his argument by giving historical evidence that a number of attempts were made to substitute fiat currencies, but failed. He further added:
“.. they have a role as crypto assets.. they have a room for financial assets in general but not cash”
The general manager of BIS further acknowledged the power of blockchain technology and how it can be used in settlement systems and added that the technology should be embraced and explored to its limits. He gave a concluding statement to his argument by stating:
“Blockchain by itself is not sufficient to think of a different monetary arrangement in a country.”
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Bitcoin’s 2017 bull run was fueled by FOMO & hype; present run more fundamentally driven, claims report
Here we go again. Another bull run. Another “hype session” among investors as Bitcoin rises again. The cryptocurrency market is well known for its incredible shift in market sentiment, especially on the back of the world’s largest cryptocurrency surging again.
Bitcoin not only reached its 16-month high today, but it also recorded a growth of 15 percent over the week. This has contributed to several analysts and industry insiders speculating how high Bitcoin will go, with Anthony Pompliano claiming that the digital currency will soon cross its all-time-high valuation of nearly $20,000 and reach a massive $100,000 by 2021.
These predictions have definitely contributed to the coin’s growth as while the present surge is similar to the 2017 rally, it’s not driven by FOMO alone.
A recent comparison drawn out by the SFOX Volatility report compared the preset rally with the bull run of 2017.
The report suggested that the rally of 2017 was largely driven by ‘FOMO.’ When Bitcoin started climbing the valuation ladder, word got out and many investors discovered virtual assets for the first time. The rally of 2017 was mainly fostered through hype and speculation, since there were no major readings or past data to back the rising price.
The present run, while similar, is different in some aspects, one of them being that Bitcoin has a larger user base now than in 2017. While FOMO remains a major factor in driving the price up, the current surge is also backed by developments in the ecosystem, such as the entry of retail investors and huge financial/non-financial institutions joining the crypto-bandwagon.
Facebook’s crypto project, Libra, and Bitmain’s pursuit for a U.S IPO have validated Bitcoin and the rest of the cryptocurrency market, a luxury not available to the market of 2017. The present rally thus, is more mature than the 2017 rally as the present market’s fundamentals are more data-driven.
There remain some stark similarities in the trends however. For instance, in 2017, the push from $9000 to $11000 took place in a period of 7 days. The current push from around $8800 to $11000 came to be in 8 days.
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