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Elon Musk: Cryptocurrency is the future; paper money will soon fade away




Elon Musk: Cryptocurrency is the future; paper money will soon fade away
Source: Unsplash

The CEO of Tesla and cryptocurrency enthusiast, Elon Musk, has once again spoken in favor of decentralized currency, stating that a day could come when it will eventually replace paper money.

In a recent episode of ARK Invest’s FYI podcast hosted by Tasha Keeney, “On the Road to Full Autonomy With Elon Musk,” the Tesla CEO spoke about the developments underway at Tesla and about cryptocurrencies, with reference to the future of finance and technology.

When asked about the topic of cryptocurrencies, Musk was taken aback, stating, “Crypto, seriously?” with the interviewer referencing Musk and Twitter’s Jack Dorsey’s recent chatter about the decentralized currency realm.

Musk stated,

“Bitcoin and Ethereum scammers were so rampant on Twitter I decided to join in and I said at one point I want to buy some Bitcoin. Then my account got suspended cause obviously there was obviously like some automatic rule that if you try to sell bitcoin or something and I was just joking.”

In late October, Musk tweeted out, “Wanna buy some Bitcoin?” which sent the cryptocurrency community into a tizzy, many users excited at the prospect of a fruitful collaboration between the Tesla CEO and others such as Binance’s Changpeng Zhao.

Following a campaign by Twitter that deleted several bogus accounts for “coordinated manipulation,” and promotion of cryptocurrency scams, Musk lauded the website’s efforts and went on to state,

“At this point, I want ETH even if it is a scam”

When asked about Jack Dorsey’s prediction that the internet will soon see a native currency in Bitcoin, Musk replied stating, “That’s interesting.”

He added,

“ I think that the Bitcoin structure was quite brilliant, its seems like there’s some merit to Ethereum as well, and maybe some of the others. But, I’m not sure if it would be a good use of Tesla resources to get into crypto.”

Musk added that one of the main downsides of cryptocurrency is the “energy-intensive” nature of production, referring to the mining process. With reference to the same he said,

“There has to be some kind of constraints on the creation of crypto. But it’s very energy intensive to create an incremental Bitcoin at this point.”

When the topic switched to the nature of Bitcoin transactions, the interviewer stated that cryptocurrencies are not widely used for retail-goods like pizza and coke. To this, Musk replied, “maybe for Coke,” referring to the recreational drug that was sold for Bitcoin on marketplaces like the Silk Road, a smudge that the cryptocurrency world is still reeling from.

Towards the end of the podcast, Keeney referenced the dire financial situation in Africa, where currency restrictions prohibit citizens from converting their currency and forcing them to, at times, go through the US dollar. In light of the same Musk replied,

“It bypasses currency controls. Paper money is going away and crypto is a far better way to transfer value than pieces of paper.”

Despite Musk’s positive stance on cryptocurrencies, his appreciation for the structure of top coins like Bitcoin and Ethereum and his affirmation that eventually decentralized currency will takeover paper money, the Tesla CEO clarified that his company will not start selling Bitcoins anytime soon.

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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise




JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.

A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.

Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.

Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.

Source: Bloomberg

It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.

Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.

The analyst added:

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.

Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:

“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”

Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.

This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.

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