Financial expert says cryptocurrencies like bitcoin are ‘apolitical’
Goldman Sachs has suggested Bitcoin could reach $100,000 (£74,000) this year as it continues to take market share from gold. Wall Street analysts estimate that the market value of Bitcoin is just under $700 billion (£516 billion). The bank added that while Bitcoin’s consumption of natural resources may be an impediment to institutional adoption, this will not hurt demand for the asset. Bitcoin is currently trading at around $46,000 (£34,000) after hitting a new high of $69,000 (£51,000) last year.
2021 has been an up and down year for the volatile asset, and while many were optimistic about crypto’s prospects, others were more skeptical.
Carol Alexander, a professor of finance at the University of Sussex, recently told CNBC that bitcoin “will likely crash” in 2022.
She said last month, “If I were an investor now, I would consider exiting bitcoin soon because its price will likely crash next year.”
Professor Alexander added that Bitcoin has “no intrinsic value” and is more of a “game” than an investment.
As CNBC reports, Professor Alexander warns that history is repeating itself, as in 2018, Bitcoin plummeted to nearly $3,000 (£2,200) after jumping to nearly $20,000 (£14,000) a few months ago. .
Bitcoin News: Alexander Says Bitcoin Will “Probably Crash”
Bitcoin News: Some Like Bitcoin
Cryptocurrency backers often say things are different this time, as more institutional investors are jumping into the market.
Cryptocurrency investors are usually encouraged when assets like Bitcoin are backed by major corporations, entrepreneurs, or even countries.
Elon Musk announced last March that his company, Tesla, would begin accepting Bitcoin as payment, but that position was abandoned just two months later.
The move sparked a sharp drop in the value of bitcoin, but Musk said in July that Tesla was “likely” to accept it again for its payment.
He said, “I would have liked more due diligence to confirm that the percentage of renewable energy use is likely to be 50% or higher, that there is a trend towards this number increasing, and if so, Tesla will resume accepting bitcoin.”
Read More: Bitcoin and Tesla Rise But Money and Gold Float – Which Assets Will Move…
Bitcoin News: El Salvador has embraced Bitcoin
“The most likely answer is that Tesla will resume accepting bitcoin.”
In September, history was made when El Salvador became the first country to accept Bitcoin as legal tender.
This week, the head of state – Neb Bukele – bolstered the value of bitcoin to reach $100,000 (£74,000) at some point over the next 12 months.
Mr Bukele also tweeted a series of predictions about Bitcoin, including “two more countries that will adopt it as legal tender.”
Nigel Green of the deVere Group said that three more countries could adopt the cryptocurrency.
He said: “I am confident that the young, independent president, Neb Bokhel, is right to have bitcoin legal tender in other countries in 2022.
“But I will go further than he did. I think it is likely that three more countries will follow the lead of El Salvador that is future-focused in the digital age.
Low income countries have long suffered because their currencies are weak and very vulnerable to market changes and this leads to rampant inflation.
do not miss
El Salvador’s plan to run Bitcoin into a volcano ends in disaster [INSIGHT]
Is bitcoin still falling? Analyst expects ‘one more’ drop [ANALYSIS]
Why is bitcoin crashing? Market survey after stern warning [INSIGHT]
Bitcoin News: Green Predicts Three More Countries Will Adopt Bitcoin
Bitcoin News: Goldman Sachs Optimistic About Bitcoin
This is why most developing countries rely on major “first world” currencies, such as the US dollar, to complete transactions.
However, relying on another country’s currency also comes with its own set of problems, which are often very costly. The rise of the US dollar, for example, will affect the economic prospects of emerging markets, as developing countries have taken over a lot of dollar-denominated debt in the past decades.
“By adopting cryptocurrency as legal tender, these countries immediately have a currency that is not affected by market conditions within their own economy, nor directly from the economy of another country.
“Bitcoin operates on a global scale and is therefore affected by broader global economic changes.”
Express.co.uk does not provide financial advice.