Nevertheless, the chances of bitcoin, the most popular of this new breed of self-clearing financial instruments, making it as a mainstream currency are now zero. Prices have been floundering at around $350 a coin for months, escalating losses for those who invested at last year’s $1,200 highs. Add to this a stream of high-profile scandals over the past year, such as the collapse of Tokyo-based currency exchange Mt Gox in February, and you realise it is not a question of if but when the public loses interest in this experiment entirely.
It doesn’t take a genius to realize that if a Bitcoin futures market is implemented, in the United States and Europe, the large speculators with bankrolls in the billions, will be more than happy to turn bitcoin into another crude oil-style pump-and-dump. In the case of Bitcoin, the volatility will kill any chance bitcoin ever had of becoming a medium of exchange.
Bitcoin will fail, not for fans lack of trying, but rather its status will never be more than an interesting concept championed by those in the techie or libertarian camp. Holding Bitcoin is more of a political expression rather than a sound economic investment. . . . Ultimately, Bitcoin will be relegated to the history books unless structural changes are made. It will never be fully adopted in its current form, being nothing more than a neat concept for people to lose money on.
“It’s not a currency now, it’s a pretend currency,” Robinson said. “It does not qualify or satisfy the requirements for a modern currency. The problem with disruptive technologies is that the disrupted has something to say about it. I say 10 years from now we will all have digital currencies – fiat currencies – and bitcoin will be remembered probably much like Pogs and Sinclair’s C5.”
One of the signs that Bitcoin is dying is that hardly anyone actually uses the currency. . . . The Bitcoin network is fading away and the price is destined to continue its downward march. This is likely to be the last year people take Bitcoin seriously (if last year wasn’t already). Whether Bitcoin disappears with a bang or a whimper, the end is coming.
At this point, it’s merely a speculative commodity, just like tulip bulbs centuries ago or even Beanie Babies more recently. . . . Bitcoin has peaked and is very unlikely to escalate significantly in value again. . . . It’s basically an elaborate Ponzi scheme. . . . While I don’t relish anyone losing money, Bitcoin basically went out of the way to make itself vulnerable. For this reason, it is destined to fail.
Even if the price of Bitcoin doesn’t go to zero, the chances the Bitcoin community convincing the wider public, governments, and industry that Bitcoin really represents the future of the world’s digital economy will become extremely unlikely. . . . this grand technological experiment may have run its course.
The Swiss Franc might be the currency getting all the attention, but the real blood bath is in Bitcoin. Remember how Bitcoin was supposed to change everything? And the dollar was dead? Boy, was that ever wrong. . . . Some are suggesting that the precipitous decline in the currency is probably its death knell.
Bitcoin is proving a big disappointment. . . . There’s almost certainly more bad news to come. The electronic token has lots of enduring problems. As a store of value that is not subject to government intervention, it lacks the support of authorities and is always in danger of being banned. . . . Defenders of Bitcoin have not given up hope. Their emphasis has shifted though, from the currency to the underlying blockchain processing software. . . . But it will not bring up the price of Bitcoin.
Bitcoin the currency may be dying, but it doesn’t matter. . . . Certainly, a trend line from November 2013 to now, extrapolated forwards, intersects worthlessness sometime later this year. . . . This could create a negative feedback loop as miners retire, the network becomes less secure and resilient, investors lose faith, and the price drops further.
Bitcoin isn’t going to replace any fiat currencies as long as it feels intuitively safer for most people to keep their savings in a bank account instead of in a digital wallet. . . . This brings us to the current crisis in Bitcoin: far from widespread adoption giving it resilience and reliability, the system may be starting to fall apart. . . . These issues add up to what we’re seeing now – the slow, inexorable decline in the price of a digital currency with no value beyond the trust in the system.
The virtual currency is looking increasingly beleaguered, and its price had been dropping steadily in recent months. . . . It is a reminder of the security issues that face any virtual currency seeking mainstream adoption, and it brings back memories of the infamous exchange Mt. Gox. . . . Combined with bitcoin’s reputation as an enabler for criminal activity, it is likely this public-image problem is hindering mainstream adoption. As one commenter on the discussion board Hacker News remarks, bitcoin is an “even worse” investment than gold.
We’ll sign off with the simple point that unless a massive amount of new capital is transferred into Bitcoin market sharpish — which is not impossible, since there are still a number of deep pocketed believers out there — it’s hard to imagine the asset class going any other way but south. Furthermore, it’s unlikely at this stage that either price rigging, mining cartels or lower energy costs will be able to reverse that trend.
It kills any chance that bitcoin could be a mainstream currency. No one wants to hold a currency that has that great a risk of depreciating in value. Most people who put money in bitcoin wallets in 2014 and didn’t spend it instantly took a hit. It is dead, let me repeat, dead, as a mainstream currency.
And that Bitcoin could only survive at the margins, where it would be isolated, and in no position to threaten Visa or Mastercard, or the underlying payment and messaging services that underpin the world financial system as it stands today. Then there’s The Oracle of Omaha who has one four letter word for bitcoin – joke.