The rumors of the death of Bitcoin may have been exaggerated, but the cryptocurrency is undoubtedly in a sickly condition.
At the time of writing, it is quoted at $ 3,591, a fraction of its historic high of almost $ 20,000 in December 2018, as the last rally fades. There are many reasons for this. The rot began when investors were given the opportunity to short sell the overvalued alternative currency, which many have done with enthusiasm.
The financial authorities feared and despised the crypts and did everything possible to undermine the sector with constant regulatory threats. Some blame the “whales”, early adopters who had billions of dollars in coins, for manipulating the market (although personally, I never saw why they would want to manipulate it downwards). The regular massive thefts of cryptographic exchanges have also undermined confidence. This is like the Wild West, without Wyatt Earp.
I think the biggest problem is that we still have to find a serious practical use for it. Why should I use crypto currencies to make international money transfers when I have MasterCard and Visa in my wallet for purchases, international currency transfers are becoming faster and more competitive as new Fintech operators emerge, and banks Digitals like Revolut give you a spot rate currency?
In comparison, Bitcoin is slow and cumbersome, while the enormous volatility of the currency makes it rather useless for payments, since you never know how much it will cost.
Although I would not be surprised to see that the value of my (very small) crypto holdings is further reduced, I do not expect them to disappear altogether because it is actually a use for Bitcoin. And no, I’m not talking about terrorist financing, kidnapping plans, drug profits or money laundering, although Bitcoin is still used for this (just like the US dollar and any other paper currency).
Problems in the store
Bitcoin still has a use as a store of value for people in very troubled countries like Venezuela and Zimbabwe, and other countries that are experiencing financial difficulties, for example, Argentina and Turkey (and perhaps the United Kingdom if it does not rate Brexit soon!)
This is only a semi-respectable use, but, again, this is just a semi-respectable currency (and that may be exaggerating). However, when people are desperate, it offers them a way to keep money moving. The commerce of cryptographic products in Venezuela has reached record highs in which it has given desperate families a store of value and the means to buy basic products such as soap and shampoo.
Once again, stocks and stocks have overcome the latest fad. Despite the current bear market, I do not see that change in my life.
Also published on Medium.