There is hardly a motto that is so controversial. While some predict a rapid increase in the price of Bitcoin, others doubt that it has a future at all. So also the chief economist of the financial institution Vanguard, Joe Davis.
When it comes to Bitcoin, the opinions of many analysts diverge. While some believe that the digital thaler can reach as high as $ 125,000, other Bitcoin investments are "human madness". Critics include particularly large Wall Street banks such as the financial institution Vanguard. Its chief economist, Joe Davis, has now spoken for the first time.
Strong price fluctuations and lack of cash flow
Davis believes that Bitcoin is not an investment and the cryptocurrency will soon fall to zero. "Unlike stocks and bonds, cryptocurrencies do not generate cash flow, such as interest payments or dividends, on the basis of which their value can be substantiated." As a result, cryptocurrency prices were not based on an underlying economy, but on speculation about possible use and possible use as a means of payment. This speculation creates a volatility that undermines the value of the Internet money as a currency.
There are other reasons why it is contradictory to consider Bitcoin as a currency. The Taler must fulfill this three properties. While he indeed has a computer and can act as a benchmark for goods and goods, it is in the medium of exchange and Wertwertbewungsungsfunktion a bit more complicated. The strong volatility keeps more and more traders and countries from accepting the Internet money as a means of payment. These price fluctuations also made it virtually impossible for the Taler to maintain its value over a longer period of time.
Blockchain technology with great potential
However, he praises the blockchain technology as a platform with great potential. With the low cost, speed and security associated with a transaction, it is becoming increasingly popular with many governments and businesses. Davis is not alone in that assessment. UBS Bank also commented positively on the blockchain. In October 2017, she estimated that her economic value would increase by $ 300 to $ 400 billion annually by 2027. It could have a significant impact on many industries, ranging from finance to healthcare and utilities.
According to Davis, however, this is no guarantee that Bitcoin will continue to record success in the future. The world is in a constant and rapid innovation process. It would introduce better and faster networks or methods that could put the previous crypto networks out of fashion. Once this happens, their associated digital money loses value.