Howard Marks, you may not have heard of him. He’s not really a familiar face in the Cryptocurrency industry, so it’s understandable. But if you take a dance over to the Fiat side of things, he’s a bit of a legend; being known as the man who predicted recent financial crisis and the Dotcom crash. This time Marks has taken to the spotlight with jabs against Bitcoin itself; calling it a fad, or even a pyramid scheme claiming that the price has only been driven up by speculation.
Since August 2016, the price of a single Bitcoin has gone from around $600 USD, to a little less than $3000 USD with companies popping out from under ever rock, trying to get into this spicy hot currency. Everything from micro lending, to financial institutions, trading brokerages, and new coins are coming out on almost weekly basis. These companies are raising hundreds of millions of dollars in Fiat currency to fund their Bitcoin operations… but yet Bitcoin is tangible, or backed by anyone, yet it relies on fiat currency such as the US dollar to function. Which makes a valuable argument for investors like Marks to claim it’s only a fad.
Bitcoin may be in a bit of a conundrum; the “coin” was developed to replace fiat currency, and avoid such things as taxes and government involvement. Doing so, has lead bitcoin down a strange and dark path involving the purchase and sales of illegals drugs, sex, and weapons. In one aspect, if Bitcoin were to become recognized as a legitimate currency or commodity; it would then become monitored and overlooked by financial regulators and Governments. Theoretically, something that has no tangible backing and relies on fiat currencies to have value, would then be regulated around a similar price of the USD or EURO, causing mass chaos to Bitcoin investors and companies. It’s hard to say whether or not people would still be interested in it if that happened. Many would cheer, and say “we won!” But the majority of Bitcoin enthusiasts would be disgusted, as that would entirely have defeated their purpose.
On the other hand, if Bitcoin and other such cryptocurrencies never become regulated, then it always relies on a fiat currency to have some value. Ergo, will never be independent. This is what has caused a lot of investors to take a concern over the validity of Bitcoins. That, and Just recently, industry leading Bitcoin Brokerage Bitmex offered a full refund on margin calls because of a technical error, causing the price of bitcoin to print 0.06 cents.
Although Bitcoin itself may a little confusing at the moment, the concept behind it makes complete sense. We’re in a highly evolving digital age with new technological improvements coming out on almost a daily basis. Evolving money into something more digital would be an extremely logical approach. But while Bitcoin and other rising Cryptocurrency companies are trying to distinguish themselves as a valid form of currency, companies like Apple, Amazon, and Paypal are taking the cold hard cash to the digital age. Which is only making it harder for bitcoin to be respected by modern society. That, and many of the legalities that apply to Fiat currencies don’t apply to cryptocurrencies, which means there’s really no security blankets when it comes to safety for its users… especially in the event of a power outage.
At the end of the day, what matters is what you think. If you think it’s valuable to you, and something that you can believe in and use. Then it’s right for you.