Friday, July 10, 2020

CME’s CEO Says Practical Bitcoin Use Cases Will Increase its Price

We’ve seen the cryptocurrency community go frenzy to a spike in Bitcoin’s price even if it lasts only for a few hours. The spike has made many to dive in without making informed decisions only to be left with a wallet that’s worth less of what was purchased. Therefore, Terry Duffy, CEO of the Chicago Mercantile Exchange (CME) is suggesting that more focus should be given to Bitcoin’s use cases instead of price speculation.

Crypto Community Loses Focus on Bitcoin’s Primary Purpose

Unarguably, to be one of the fastest ways of making money online is not Bitcoin’s primary purpose. Its creator, Satoshi Nakamoto had the idea of decentralization, where a digital currency will change traditional markets and take away the full control government have over a medium of exchange.

In the same vein, Bitcoin’s purpose is to eliminate distance barrier and enable parties to transact irrespective of where are and at what time of the day. The list could go on and on. However, it appears that most investors have lost sight of these and are more interested in what they can get out of it within a twinkle of an eye.

Price Increment is Still a Possibility Through Use Cases

Nevertheless, Terry Duffy, while in a recent interview with Business Insider, has made a suggestion. According to him, the community can still get what they what in terms of price increment, but then, practical use cases must be created for Bitcoin first. The asset should have something it can be used for in practical terms.

When that happens, others will be naturally be drawn to the crypto space which will, in turn, impact on Bitcoin’s price. The appreciation in value will also be maintained instead of what was evident in late 2017. At that time, Bitcoin’s spike could largely be attributed to speculation and hype, which was unable to maintain its price.

The CEO pointed out an instance of a use case in the area of Stablecoins which he believes makes them interesting. These are digital assets that are backed by fiat and the paper money is held in reserve depending on the number of coins that are in circulation. Duffy believes that being less volatile than other cryptocurrencies gives them their demand.

Limited Supply of Bitcoin Gives it a Remarkable Feature

On the other hand, the CEO made remarks about the limited supply of cryptocurrencies. Bitcoin, for instance, currently has a supply of about 17 million and the highest it’ll ever have is 21 million. So far, a number of coins from that 17 million have been lost forever.

That aside, Duffy said this limited supply is not what regulators are happy about. He believes that they would have preferred a system that will enable them to print more money as they’d like. Governments, do not want to be “responsible and run everything on a even-for-even basis”. Nevertheless, if governments adopt Bitcoin, then major companies will also troop into the industry. Until then, a lot can be expected.

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