ForexMinute.com – Bloomberg – a renowned business news service – recently voted Bitcoin as 2014’s worst investment, thus beating the Russian Ruble and the Ukrainian Hryvnia in terms of maximum drop.
As known to everyone, the new-age cryptocurrency has lost half of its value over the course of 12-months – crashing from the peak of $1,100 to the current position of $330. This drop somewhat turned out to be worse than the Ruble’s, which fell around 45% against the USD due to trembling oil prices and certain political reasons.
“A bitcoin has lost 58 per cent of its value in US dollars this year and 72 per cent since last November. If you’d invested $10,000 in bitcoin at the beginning of 2014, it would be worth $4,202 today,” Bloomberg demonstrated.
Despite being a marvellous innovation, Bitcoin continued to be the victim of unnecessary scandals, starting with China’s biased rulings over local Bitcoin companies, followed by the controversial collapse of Japanese Bitcoin exchange Mt. Gox – everything added to the negativity Bitcoin was already surrounded with.
In the meantime, the digital currency kept tackling governments and regulators all around 2014, thus affecting its potential user adoption by greater extents.
Kevin Dowd, a finance and economics professor at Durham University however thinks Bitcoin is the victim of its own hype. “It’s become the subject of a religion and if you don’t agree with it, you must be a lunatic,” he said. “I think many of the ‘crypto-currencies’ are disastrous investments. I would advise people just to get out.”
Tom Robinson supported the theory and said: “You have a peak of hype and maybe realistic expectations, followed by a trough of disillusionment and eventually you reach a plateau. I think we’re in the trough of disillusionment,”
Many Bitcoin supporters also think the currency to be in a realistic position at this point of time; though undervalued. For long-term prospects, they still think this cryptocurrency to be a better alternative to cash payment methods, provided with technological advancements and good marketing among the common users.
Bitcoin has already found its place in the invoices of companies like Microsoft, Dell and Time. All it needs is a push for being used as a widespread medium of exchange. Professor Philip Booth from the Institute of Economic Affairs thinks that that “bitcoin’s successors will learn from its mistakes and the trial-and-error process of the market will produce something that is more appropriate for use as a widespread medium of exchange.”
To contact the reporter of the story: Yashu Gola at Yashu@forexminute.com