ForexMinute.com – Some months before (which actually seems like years before), Wences Casares, the CEO of Bitcoin startup Xapo predicted the coin’s value to reach $1 million in the next 10 years. Undoubtedly, it was a sensational prediction for a cryptocurrency which was already recovering from a mishap that took place at a Japanese exchange (you know it right!). But how much it held back, and how much it sustains in the present market scenario is a thing which requires a wider debate.
The only error in Wences’s prediction, as we believe, is his consideration of Bitcoin as only a trading asset. It might be a best-case scenario in which this digital currency becomes the working capital of international trade, but never can we ignore that it’s an open-source code replicated and improved by many other cryptocurrencies. Even gradually, but other feature-rich coins can indeed pose as serious competition to Bitcoin that will eventually reduce its demand, as not expected by Wences.
As shallow as it may sound, but that is the fact we are facing in today’s market in which Bitcoin is gradually losing its value. The more it is being adopted by commercial ventures, the further it is looking like any other sovereign currency. The introduction of third-party payment processors, providing merchants a way to quickly convert their Bitcoin sales into fiat, or the exchanges offering mouth-watering features like margin trading options and bots are causing serious crashes lately.
Bitcoin indeed made people rich, probably because of an impeccable hype it created with its volatility. But when alternative cryptocurrencies, or altcoins, came into the market, a huge reasonable crowd was shifted towards them while expecting the same quick-rich scheme. Growing adoption, at some point, has repaired this stigma off the cryptocurrency sector and much focus is now on bettering the technology.
But the volatility is one such thing that has never escaped this market, nor will (at least for the coming years). Greed still drives the prices; shorted Bitcoins come back only to drive the prices up; the demand-supply ratio is imbalanced; and in this whole scenario, nobody helps in actually meeting the demands for Bitcoins. The Bitcoin is first spent, then converted into fiat, stored, and resold back to the market at higher prices. This is an unfortunate loop which never promotes the idea of using Bitcoin as a whole currency. The decentralized market becomes centralized, unofficially.
An ideal cryptocurrency market would be the one which has its own environment. As Dogecoin community once suggested “1 Doge = 1 Doge”, a Bitcoin value too must be viewed on its own credibility, minus sell-offs. The technology offers us more than just a medium to exchange money. It is freedom and transparency.
To contact the reporter of the story: Yashu Gola at firstname.lastname@example.org
Subscribe to our daily forex newsletter for free by visiting www.forexminute.com/newsletter