An investment guru issues a warning. Bitcoin is missing critical components that would make it a currency of the future.

0

An investment guru issues a warning. Bitcoin is missing critical components that would make it a currency of the future.

An expert has warned that BITCOIN cannot be used as genuine money due to a “fundamental” absence of features that would make such digital assets a viable medium of exchange.

Chris Clothier, fund manager at London-based CG Asset Management, told This website that, despite what proponents of the cryptocurrency may claim, Bitcoin lacks a key ingredient that will allow it to be utilized as a future transactional currency. While he acknowledged the blockchain network’s potential benefits, he cautioned that the market will evolve and that investors should be cautious about where they put their money. Mr Clothier’s remarks come as a craze for investing in Bitcoin and other cryptocurrencies has swept the world, particularly among young people. His remarks come as the Financial Conduct Authority of the United Kingdom has barred Binanance from dealing in the country due to concerns about its unregulated conduct.

Mr Clothier went into great detail about how the current Bitcoin market has delivered on very little of what proponents of the cryptocurrency originally predicted.

“The arguments were that it (Bitcoin) would become a key component in money remittances, which are often migrant workers sending money home,” he explained.

“And that it would supplant existing banking networks and emerge to dominate a significant portion of that market.

“And that, in turn, is what drove the value arguments, which was to say, let’s suppose global remittances are several hundred billion dollars.”

“Let’s say Bitcoin grabs 10% of that market….,” he went on to remark. And if that money is retained as currency for three days, the quantity theory of money suggests that Bitcoin has inherent value.”

“As we know, that has not come to pass,” he added.

He noted that, despite investor disagreements over Bitcoin’s potential as a future currency, “Bitcoin is not used in transactions,” and that “that is one of the three essential characteristics of money.”

Mr Clothier explained how currency is defined: “It should be used in transactions, it should be a unit of account, and it should be used as a store of value.”

He concluded that it presently “only fulfills that third of the three,” making it ineffective as a currency and undercutting expectations that it will catch up. “Brinkwire News in Condensed Form.”

Share.

Leave A Reply