bitcoin store of value

Speechwriter for Former US President George Bush Says BTC Rally Driven by ‘Historically Low Interest Rates’

23/02/2021 by Idelto Editor

A speechwriter for former U.S. President George W. Bush and a bitcoin critic, David Frum has claimed that the low-interest rates are fueling the crypto asset’s rally. Frum suggests that the crypto asset might experience a “fast and deep price crash” if and when interest rates start to rise.

Institutional Interest in BTC

In comments made via Twitter, Frum, who regurgitates the BTC mining inefficiency claims, also attacks the crypto asset’s store of the value proposition. He states that of “all the pro-bitcoin arguments, surely the worst is the store against inflation.”

Still, despite this criticism, the crypto asset continues to gain support from institutional investors and large companies. For instance, electric carmaker Tesla, which recently amended its investment policy, revealed it had bought BTC worth $1.5 billion.

Furthermore, according to bitcointreasuries.org, the website that tracks companies or institutions that have exposure to BTC, over 1.3 million coins or 6% of the total circulating supply is held by large corporations.

The True Value of BTC

In the meantime, Frum’s remarks about bitcoin have sparked a debate on Twitter concerning the crypto asset’s true value proposition. For instance, in his response to the remarks, Alex Gladstein, the chief strategy officer with the Human Rights Foundation (HRF), reminds the former speechwriter about BTC’s human rights implications. Gladstein, who recently endorsed the crypto asset, said:

Only 13% of humans live under a liberal democracy with a reserve currency. The other 7 billion+ live under authoritarianism or a weak currency. Bitcoin is a powerful tool for them.

Also, another user named Unfettered Nic Carter shares with Frum the other likely outcome of rising interest rates. The user explains that “if interest rates rise, the corporate sector and the government will be insolvent.” Carter then asks: “What do you think is more likely – we bankrupt everything, or we print our way out?”

Meanwhile, other Twitter users like Lepton939 said they were in agreement with the assertion that BTC provides “immunity from inflation.” Nevertheless, this user expresses concern at the crypto asset’s volatility saying:

“Since the price fluctuates so wildly I’m afraid to hold it. But I’m guessing its real value is the scale of illicit transactions it accommodates.”

Still, other users like Jeffrey Smith are praising Frum for making these remarks about bitcoin. In his tweet, Smith remarks:

Exactly. Zero intrinsic value (which is related to your interest rate observation); 100% speculative value (= bigger fool theory); & environmental mess to mine. What’s not to like?

While Smith suggests that “gold is very similar” he is however quick to explain that unlike BTC, the precious metal can be used for making jewelry. He then concludes by saying: “There’s no Bitcoin jewelry as far as I know.”

Do you agree with Frum’s assertion that BTC value will crash once interest rates start to rise? Tell us what you think in the comments section below.

Gold Bull Jeffrey Gundlach Says ‘BTC Maybe the Stimulus Asset’ Ahead of the Precious Metal

21/02/2021 by Idelto Editor

Gold Bull Jeffery Gundlach Says 'BTC Maybe the Stimulus Asset' Ahead of the Precious Metal

Renowned gold bull and CEO of investment management firm Doubleline, Jeffrey Gundlach says bitcoin may be the “stimulus asset” while adding it “doesn’t look like gold is.” Gundlach, a self-professed long-term dollar bear, had preceded his comments about bitcoin by remarking that “lots of liquid poured into a funnel creates a torrent.”

BTC Outperforming Gold

In the same tweet, Gundlach suggests that he came to the conclusion after staying “neutral (on both gold and the dollar) for the past six months.” In the past six months, the two stores of value have had contrasting fortunes with BTC appearing to win the battle for supremacy.

After starting September 2020 trading at just under $12,000, BTC has since rallied to peak at $57,399 on February 20, 2021, according to Messari. At the time of writing, the crypto asset was trading above $57,000. In contrast, gold, which reached its all-time record high of $2,067.15 per ounce on August 7, 2020, has largely stayed under $1,900 for the rest of the year.

Also, despite the many predictions of gold breaking out, the commodity has so far failed to match the expectations. On the other hand, BTC could be on course to beat the $100,000 mark after breaking past $50,000.

Corporations Choosing BTC Ahead of Gold

In the meantime, Gundlach’s comments about BTC have coincided with the shifting store of value preferences by large corporations. For instance, in its recent filing with U.S. Securities and Exchange Commission (SEC), Tesla only revealed its $1.5 billion BTC acquisition. While the electric carmaker’s updated investment policy authorizes the company to also take positions on gold bullion or gold ETFs, the company so far only focused on BTC.

Meanwhile, Gundlach’s views on BTC are now at odds with the crypto asset’s prominent opponent Peter Schiff. The gold bug, who has previously praised Gundlach, has already attacked Tesla for choosing BTC ahead of gold. Similarly, other supporters of gold on Twitter expressed their disappointment with Gundlach’s apparent pivot to the crypto asset. One user named Pet Rock said:

Why Bitcoin and not any of the thousands of other coins that do the exact same thing? Why Bitcoin instead of a future Amazon coin or Google coin? I am amazed at such smart people being tempted by something that is wishful thinking.

Another user, Dumbmoney tweeted:

“Bitcoin’s volatility precludes it from being a store of value. It is also correlated with bubble stocks. It is speculative mania. It will pop. Gold is simply tracking the inverse of real yields. If inflation picks up and YCC happens, gold will soar. Pain until then.”

Still, some users like Harry expressed support Gundlach saying:

“Bitcoin is gold 2.0. Clearly, the market is telling you that. In the past, it would’ve been gold and the miners taking off. No more. It’s the digital age.”

What are your thoughts on Gundlach’s tweet? You can share your views in the comments section below.

Haunted by Past Elon Musk Predictions, Gold Bug Peter Schiff Tears Into Tesla’s BTC Acquisition

10/02/2021 by Idelto Editor

After previously claiming that Elon Musk was too smart to buy bitcoin, Euro Pacific Capital CEO Peter Schiff is reacting angrily to reports that Tesla has acquired the cryptocurrency. In a series of tweets on February 8, Schiff now claims that Musk has no interest in bitcoin’s store of value credentials but is only interested in pumping the crypto.

BTC Bias Allegations

In its filing with the U.S. Securities and Exchange Commission (SEC), Tesla says it decided to acquire bitcoin because it fits with the company’s updated investment policy. According to the company, this new policy, which provides Tesla with the flexibility to diversify and maximise returns on idle cash, authorizes the company to buy gold bullion as well.

However, in one of his tweets, Schiff appears to take aim at Musk and Tesla for choosing to announce the BTC acquisition while not mentioning anything about gold. Schiff says:

Though Tesla’s SEC filing also authorizes the purchase of gold, no purchases were disclosed, and my guess is that none are actually contemplated. Elon Musk has no interest in a store of value or an inflation hedge. His goal is to pump more air into the bitcoin and Tesla bubbles.

Immediately following Tesla’s acquisition, BTC’s value spiked with the top crypto setting another all-time high (ATH) of just above $48,000. After Tesla’s acquisition, some bitcoiners now predict the crypto asset will reach $100,000 by year-end as more large institutions join the buying frenzy.

BTC Not Crashing

Meanwhile, Schiff, who has predicted BTC’s crash on numerous occasions, also attacks the mainstream financial media for “doing everything it can to promote” bitcoin at the expense of gold. In particular, the gold bug is unhappy with the U.S. network CNBC’s coverage of Tesla’s bitcoin acquisition. Schiff says:

As expected, CNBC is providing non-stop coverage of Tesla’s bitcoin buy, with one guest after another, most with a vested interest in promoting bitcoin, praising the decision. No guests have really criticized the decision, to the delight of Grayscale, CNBC’s biggest advertiser.

In the meantime, on Twitter, user Peter Elon is quick to remind Schiff that in just under 48 hours after the announcement, Tesla’s BTC investment is already $150 million up. Another user, Anthony Kloda explains why Schiff is rattled. He says:

“Peter is rattled because the bitcoin narrative currently is digital gold and he’s afraid of an institutional shift from physical gold to bitcoin driving down gold leadership position as the dominant inflation hedge. In my opinion, there is more than enough room for both.”

What are your thoughts on Peter Schiff’s latest anti-BTC tweets? Tell us what you think in the comments section below.

Volatile Bitcoin Not a True Store of Value Just Yet, Says Fidelity Digital Assets Head

05/12/2020 by Idelto Editor

Fidelity Digital Assets president Tom Jessop says that bitcoin is not a true store of value just yet because the digital asset is still too volatile, Reuters reported. However, investors are optimistic bitcoin will attain this status.

“We use the word ‘potential store of value’ as bitcoin is still extremely volatile, and by any standard perhaps would not achieve the mantle of a true store of value,” Jessop told Reuters’ Global Investment Outlook Summit 2020 on Thursday.

“But aspirationally it is, and that’s one of the reasons why so many investors are now thinking about this space constructively.”

Bitcoin (BTC) hit an all time high of $19,864 on Nov. 30, fuelled by massive institutional demand. The asset notched up about 47% in gains last month, and is up more than 400% since the Black Thursday crash of March 12.

Institutional investors such as Microstrategy, Square and others have muscled their way into crypto because they are convinced that bitcoin – with its maximum supply cap of just 21 million coins – is a safe hedge against monetary inflation, particularly at a time of limitless government spending.

But the digital asset has also elicited derision on account of its volatility. For example, in 2017, bitcoin soared about 400% in just 35 days, before it lost half its value within 30 days, Reuters reported. Recently, BTC lost $3,000 of its value in a matter of minutes after having rallied strongly.

However, Jessop’s comments appear in contrast to Fidelity Digital Assets’ deep involvement in the cryptocurrency business. The company, a unit of $3.3 trillion-asset manager Fidelity Investments, offers crypto trading and custody services to financial companies and corporates.

In October, Fidelity released its Bitcoin Investment Thesis, which on the whole supported bitcoin as viable investment option. The firm has also expanded its crypto trading and custody services to Europe and Singapore citing “significant interest”.

What do you think about bitcoin’s store of value status? Let us know in the comments section below.

The post Volatile Bitcoin Not a True Store of Value Just Yet, Says Fidelity Digital Assets Head appeared first on Bitcoin News.

‘Dr Doom’ Nouriel Roubini Admits Bitcoin May Be a Store of Value, Sees Big Revolution in Central Bank Digital Currencies

09/11/2020 by Idelto Editor

Economist Nouriel Roubini, also known as “Dr. Doom,” has admitted that bitcoin may be a store of value. Roubini sees a “big revolution” coming in the next three years due to central banks launching their own digital currencies.

Nouriel Roubini Sees Store of Value in Bitcoin

After years of publicly mocking and ridiculing bitcoin, Nouriel Roubini has admitted that bitcoin may be a partial store of value.

Roubini teaches at New York University’s Stern School of Business and has his own economic consulting firm called Roubini Macro Associates. Famed for predicting the housing bubble crash of 2007-2008, his gloomy predictions have earned him the nickname “Dr. Doom” in the media.

Dr. Doom has been a long-standing critic of bitcoin. In a Senate hearing in October 2018, he called cryptocurrencies “the mother of all scams and bubbles.” He also said that the cryptocurrency world is a “stinking cesspool” and is fundamentally worth nothing.

However, Roubini may have changed his view about bitcoin, at least to a certain extent. During an interview with Yahoo Finance on Friday, he was asked what he thought of bitcoin now that it just had a bull run. After reiterating his stance that it is not a currency, Roubini said:

It may be a partial store of value because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time.

As for other cryptocurrencies, Dr. Doom said: “most of those other ones literally is done ad hoc, and they’re being debased faster than what the Fed is doing.”

Roubini also explained why he thinks that “cryptocurrency is a misnomer.” For something to be considered a currency, he described that it needs to be a unit of account, a single numeraire, a scalable means of payment, and a stable store of value that is not very volatile.

He claimed that bitcoin is not a unit of account because “Nothing is priced in bitcoin or any other cryptocurrency.” In addition, he said that it is not a numerator because there are many tokens, and it is not a scalable means of payment because you can only make five transactions per second, unlike with the Visa network where you can make 25,000 transactions per second.

As for the future of cryptocurrency as an asset class, he emphasized that in his view, “it’s not scalable, it’s not secure, it’s not decentralized, [and] it’s not a currency.”

Furthermore, he explained that many central banks are working on central bank digital currencies (CBDCs). When they are launched, every individual can have an account with a central bank where they can do payments from. When that happens, he said: “Not only you don’t need crypto, you don’t even need Venmo. You don’t even need a bank account. You don’t even need a check.” Dr. Doom elaborated:

The big revolution we’re going to see in the next three years is going to be central bank digital currencies. They’re going to be crowding out digital payment systems.

What do you think about Nouriel Roubini’s view? Let us know in the comments section below.

The post ‘Dr Doom’ Nouriel Roubini Admits Bitcoin May Be a Store of Value, Sees Big Revolution in Central Bank Digital Currencies appeared first on Bitcoin News.