Bitcoin along with other digital currencies, AKA cryptocurrency or just crypto, are causing much controversy within the financial world. This makes crypto appealing for both valid (for instance, supply chain transactions between a business and its sellers ) and prohibited (laundering of cash from drug trades ) use. Independent of its intended goal, cryptocurrency has turned into a vehicle for extreme speculation among investors and traders. The worth of a Bitcoin jumped to almost $20,000 in overdue 2017 before falling back radically. Enormous daily swings in cost, inducing fortunes to be lost and won, are typical to the majority of cryptocurrencies. Though some financial specialists see great possibility in cryptocurrency, others believe it reflects an extremely inflated advantage very similar to other bubbles of yesteryear. We wanted to hear exactly what the fiscal pros had to say, so we asked them to consider in seeing their opinions and guidance about Bitcoin and cryptocurrency.
1. Robert Lons
Co-founder of BitcoinWebHosting.net
“Bitcoin is an interesting idea, but I think their mechanism for regulating the currency supply is fundamentally flawed. Because the Bitcoin supply doesn’t increase in proportion to the growth or use of Bitcoins, there is a deflationary effect, creating an incentive for people to hoard Bitcoins rather than spend them. Gresham’s Law in economics suggests that for a complementary currency to be successful, it needs to have an inflationary effect that exceeds inflation in the national currency.”
2. Alex Zorach
Community Currency Developer, Founder of Merit Exchange LLC
“At this point, Bitcoin is neither a legitimate form of currency nor an investment. Until it gains widespread acceptance and price stability, it will never be a mainstream method of payment. And from an investing perspective, Bitcoin’s uncertain future and the lack of any meaningful fundamental metrics make it a speculation at best, and gambling at worst.”
3. Anton Ivanov
Founder of DreamsCashTrue.com
“The biggest challenges that Bitcoin currently faces are flow of funds, a lack of market makers, and outsized exchange rate risk. It’s nearly impossible to move USD in and out of the largest trading platform (MtGox) and, as a result, there are very few significant market makers participating in the exchange. Absent reliable providers of a liquid marketplace, volatility will remain high. This presents major difficulties for businesses and individuals that might otherwise accept Bitcoin as payment for goods and service in forecasting Bitcoin exchange rate risk. Bitcoin can’t be a viable long-term currency unless, and until, it is more broadly accepted as an exchange medium for items of real value (i.e. these goods and services). These challenges are interconnected and the current regulatory assault is the single most important aggravating factor to these circumstances.”
4. Andrew Magliochetti
Managing Director, Maroon Capital Group
“Most finance pros are divided on Bitcoin’s usefulness, value, legality, and whether it’s a currency or commodity or something else. But one thing we can all agree on is, while it’s much safer (and cheaper!) for a merchant to receive a payment in Bitcoin over credit card, only very few merchants in the world accept it, which is keeping the awareness, price, and usefulness of Bitcoin low. So, until accepting Bitcoin becomes ubiquitous, where purchasers and vendors won’t ever need to exchange it for fiat currency because they can spend it in most places, Bitcoin users need to continually exchange their coins for $USD or look for services to make spending coins as easy as swiping a credit card.”
5. George Burke
Former CMO of cryptocurrency exchange Crypto.St. Founder of payment startup FreshPay.
“Bitcoin is a scam that needlessly hurts the environment: 1) Round trip trades inflate prices and make it look more liquid a market, according to one of the founders of RSA. 2) The European Central Bank says it’s a risky system for its users and could easily become illiquid. 3) The Electronic Frontier Foundation won’t accept Bitcoin for all the legal concerns associated with it from the stamp act, to money laundering, to tax evasion. 4) The system is prone to theft given the file sharing nature and this has occurred several times. 5) Computers processing Bitcoin transactions use over $100,000 worth of electricity everyday.”