2019-1-24 19:56 |
There’s been no shortage of Bitcoin naysayers who have sounded off against the cryptocurrency. Some of them, like BCG Ventures founder Jeff Schumacher, can be quite forceful and direct in their criticisms.
At the ongoing World Economic Forum in Davos, Switzerland, Schumacher admitted in a panel how cryptocurrency technology was good but that Bitcoin was heading to zero since it is not “based on anything” and is not a real currency.
Somewhat ironically, Schumacher has invested money into blockchain companies. Others on the panel, like Ripple CEO Brad Garlinghouse and 500 Startups partner Edith Yeung, are also bullish on the blockchain.
Schumacher justified his Bitcoin zero predictions by asserting next-generation protocols would do a better job at transforming cryptocurrency into “real” money.
The idea of Bitcoin’s price sliding down to zero is an impossible idea, according to CCN’s P.H. Madore.
Madore’s arguments focused on the “rational-self interest” and the bevy of “true believers” in the cryptocurrency, no matter the cost.
The Bitcoin market would only crash down to zero if pretty much every holder decided to sell. This is virtually impossible since even conservative estimates say less than half the Bitcoin in existence are available to be exchanged.
A report from Chainalysis found that 42% of people who hold at least 200 BTC did not send any out during the December 2017 price peak.
Questions remain why enthusiastic holders of Bitcoin would decide to stay put during the December 2017 price spike but then decide to sell out if the cryptocurrency was cheap. Madore asserts how Bitcoin’s status as solely a speculative trading instrument still made it the darling of hedge funds and retail investors.
Due to the large amounts of Bitcoin stored in different wallets and other places, a lot of moving parts would have to start spinning for the price to ever reach zero.
This would incorporate situations where traders were willing to take thousands of dollars of losses on each coin, the shuttering of a majority of exchanges, and the malfunctioning of trading bots who are primed to buy cheap cryptocurrencies.
Many of Bitcoin’s earlier adopters are not as much interested in converting it to fiat but are waiting for the day Bitcoin can be used in the everyday world.
This idea falls in line with a larger “buy and hold” strategy that a large enough amount of Bitcoin investors still believe in, which means there will always be someone who is not interested in selling out, no matter the price.
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