We have already got used to extreme volatility of many virtual currencies and first of all Bitcoin. It seems that not so long ago the rate was breaking records one after another, having reached its all time high of $20 thousand, and today it is trying to keep $8 thousand, if to say nothing of smaller daily fluctuations. However, can world’s first virtual currency lose all its value and cost zero? The Coin Shark will tell, whether Bitcoin can go full down and whether we should expect that to happen.
The answer basically lies in bitcoin’s prospective to be massively used and finally become a kind of a proper currency which, moreover, bases its value not upon world supplies (as gold) or state authority and economy (as fiat money), but upon mathematically sound and utile ways to transfer information.
A major american bank holding company Morgan Stanley has issued a note where a group of company’s specialists headed by James Fawcett analyzed the cryptocurrency market and concluded that Bitcoin can lose its value completely if people don’t use it as a mean of payment worldwide, – reports Business Insider. It is also mentioned that only a few of hundreds major online retailers currently accept Bitcoin.
However, there are many agent services that accept BTC payments and enable users to spend their virtual currency even on platforms where it is not accepted directly. Generally, we can observe the growing liquidity of the virtual currency, so if the coins themselves will be alright, the number of places to spend Bitcoin will increase. However, it will probably never be a good bargain to buy milk or bread with bitcoin, but that’s the issue we are going to talk next.
Bitcoin has several technical problems that by the way some altcoins are trying to solve. A confirmation time basically depends on a transaction fee, which means that cheap transactions are going to take more and more time. The time of transaction also increases respectively to the growing bitcoin price and the more users are there in the system the more time they have to wait for their transactions.
It probably does not mean that bitcoin is self-defeating and especially in the short term. However, these problems definitely threaten the massive adoption of this cryptocurrency.
Early in 2018, full-time Chair of European Securities and Market Authority Steven Maijoor told Bloomberg, that crypto investors had to be ready to lose all their money invested in Bitcoin. The reason would be the extreme volatility that would never let Bitcoin become a proper currency.
Anyway, even if these problems potentially cut down on Bitcoin’s rate it will hardly decrease to zero, as long as the cryptocurrency market exists. Today BTC dominates among all other virtual currencies (there are currently more than 1500 of them) by more than 40%, and even if other altcoins that are technically better developed someday squeeze their grandparent, they won’t probably destroy it completely. However, even if it happens, it will be such a distant future that in terms of the cryptocurrency market, one can only make predictions and speculate.