Bitcoin slumped to a three-month low recently and its movement closely mirrored the decline in financial markets.
Bitcoin bulls often describe it as an asset uncorrelated with traditional financial markets, CNBC reported, but experts have noted increasing similarities in Bitcoin and stock price movements.
Also comes as Dogecoin co-founder Jackson Palmer wrote a Long article on Twitter About cryptocurrency predation for the most vulnerable.
He wrote: “These days, even the most modest cash of cryptocurrency will lure smudges from the powerful figures dominating the industry, angering retail investors who have sold the false promise of becoming a billionaire one day.”
Q: Is cryptocurrency fading away?
Ray Major, Sandage
number: The allure of cryptocurrency remains, but the recent market volatility reinforces the fact that cryptocurrency is highly speculative. Much of its value is based on a general “gambling mindset” rather than sound investing principles. Lots of people invest in cryptocurrencies like lottery tickets, hoping for big payouts without understanding or caring about what is driving the price. Encryption is here to stay. Some of the cuteness will fade as it matures, but for now, stay tuned for a wild ride.
Lynn Reiser, Point Loma Nazarene University
Yes: As the Fed begins to tighten monetary policy, riskier assets will look less attractive. Cryptocurrencies clearly fall into this category. Its volatility reduces its use as a fixed store of value or as a medium of exchange. Their secrecy continues to fuel illegal activity. Environmental concerns have also increased due to the extensive use of electricity. Central banks have declined and are likely to switch to stablecoins, backed by national currencies, or their own digital currencies.
Reginald Jones, Jacobs Center for Neighborhood Innovation
number: Cryptocurrencies continue to expand as an emerging currency. There are now thousands of cryptocurrencies in the asset class. Although it is still far from being used as the main sources of payment, the past year has seen more US companies accepting cryptocurrencies such as Bitcoin. trend is likely to increase. The prediction is that more countries will follow in accepting the currency as legal tender. All this does not mean that the cryptocurrency will get away with the impasse – perhaps even the top – in the market we have seen.
Kelly Cunningham, San Diego Institute for Economic Research
number: the The government is printing money at a dizzying pace in response to the shutdowns and the associated economic turmoil, leading to massive inflation, making virtual currencies more attractive. Cryptocurrencies are designed to create financial sovereignty for all and have a future like the Internet itself. Cryptocurrencies can replace central banks and traditional banking services and challenge national financial monopolies. Virtual currencies provide their own accounting units and payment systems, which allow peer-to-peer transactions without central clearinghouses and without central banks.
Phil Blair, Workforce
YesI compare it to the public’s perception of a Ponzi scheme. Too good to be true. And with trusted financial advisors not pushing cryptocurrency products, and usually mentioning buying at your own risk, the product will never become mainstream. It feels like such a desperate move for people with limited resources to take their hard-earned dollars and roll the dice over whether, for unknown reasons, a product will rise or fall on a daily basis.
Gary London, London Moder Consultants
Yes: as an investable commodity that smells of tulips. While it will have a permanent place in the global currency, its appeal as an investment vehicle with unlimited upside is bound to fade. Early investors often made a lot of money. Its promise lies in its core premise of separating money from banks or the government, making it a fungible global currency.
Alan Jean, University of San Diego
Not participating this week.
James Hamilton, University of California, San Diego
Yes: There is a market value for cryptocurrencies. But as an asset class, the vast majority of investors should avoid it. The value of Bitcoin is too unstable for it or other cryptocurrencies to replace traditional currency as a logical way to store wealth or pay for transactions. Too many people were jumping in their cart, mistakenly believing that anything that rose in value would continue to do so.
Austin Neudecker, Weaving Growth
number: Cryptocurrency represents a shift in the way value is created and transmitted. Essentially, cryptocurrency is built on a basic protocol called blockchain, which enables people to transfer digital ownership of anything without the need for an intermediary. Regardless of the success or failure of any particular digital currency, its existence is not a fad. This technology will change how transactions work, and even business models.
Chris Van Gorder, Scripps Health
YesCryptocurrencies have received unwelcome attention from regulators and tax authorities as they recognize that a small but growing number of transactions are being used for illegal purposes, such as money laundering, tax evasion, fraud and outright theft. According to Chainalysis, illicit transactions totaled $14 billion in 2021, up 79 percent from $7.8 billion in the previous year. The threat of more government scrutiny and potential fraud may have reduced the attractiveness of cryptocurrency transactions and investment.
Norm Miller, University of San Diego
number: With the likes of Matt Damon pushing Crypto on every channel with lines like “Fortune Favors the Brave” and Crytpo.com now sponsoring sports arenas, it’s not ready to fade anywhere, although no one knows how to estimate the underlying value. Crypto “investors” say the supply is limited, but it is easy to start new cryptocurrencies and hope that they will pick them up like Dogecoin or Polkadot (no joke). Coinbase claims 68 million verified users and 6000 different cryptocurrencies, with new coins launched weekly.
Bob Rauch, Rauch & Co.
Not participating this week.
Jamie Moraga, IntelliSolutions
number: Cryptocurrency is a risky endeavor due to its volatility. Investors who care deeply about price may be frustrated that prices have fallen from their highs in 2021, but are still rising year after year. Other metrics, including developer activity, startup funding, and active users, indicate continued strong interest. Non-fungible tokens (NFTs) are an emerging crypto technology that is growing in popularity as unique digital assets (art, music, photos, and videos) are not easily sold to the masses via blockchain services. Cryptocurrency is evolving, not fading away.
David Ely, San Diego State University
number: Cryptocurrency prices and trading activity, like other speculative assets, react to changes in interest rates, expectations of future economic conditions, and uncertainty. Investor sentiment towards cryptocurrencies will fluctuate over time leading to changes in the volume of inflows into these markets. However, overall investor interest remains strong. Derivatives now offer additional avenues for exposure to cryptocurrencies. Cryptocurrency regulations adopted in the future may have the greatest impact on the pace of expansion.
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