The success of Bitcoin, which has led the digital currency to become one of the world’s most sought-after assets, continues to be on the rise. These days the cryptocurrency is not just seen as an investment asset by many of its traders and investors, as it has become a source of payment and financial transaction tool just like local currencies. However, An Economist, who also doubles as a lecturer at the London School of Economics, Jon Danielson, feels that the cryptocurrency’s success is well acknowledged but disagrees that it will replace or even co-exist with Fiat currency in the future.
Fiat currencies’ ease of doing business beats Bitcoin, according to Danielson
In his blog post, Jon Danielson feels that it will make no sense for cryptocurrencies like Bitcoin to become something that the world will depend on in the future, considering the unstable nature of its value. The Economist feels that if Bitcoin should ever replace Fiat currencies globally, the inequality will be too much. There is a possibility that the value of the digital asset may head to zero at any point, according to The Economist. Bitcoin continues to be at the forefront of debate amongst many of its proponents and critics.
The cryptocurrency critics, like Jon Danielson, are individuals who have refused to take a very enthusiastic approach to the digital asset, as they believe the eleven-year-old asset does not have a future in the world. Critics have frequently compared the cryptocurrency to traditional assets like Gold, whose price is not as volatile as Bitcoin and whose market is regulated. However, many of the cryptocurrency critics, unlike Jon Danielson, have now started to take another look at the cryptocurrency. They believe that the asset’s future, which had seen its fortunes rise by more than 100% in the last three months, is bright.
Danielson’s argument is flawed
The argument of Jon Danielson about Bitcoin is somehow baseless. Bitcoin as a form of payment is relative, as many traders who accept the cryptocurrency do it because they want to and are interested in the cryptocurrency. The financial transaction conducted with Bitcoin by its holders is subjected to interest, and unlike the belief of inexperienced ones like Jon Danielson, it is not based on sentiments. However, Jon Danielson’s concern should raise why the demand for Bitcoin is at a high. The growing demand for cryptocurrency by many investors, especially of institutional nature, has been high recently.
Many feel that it would profit them in the long run if they commit their treasury to the cryptocurrency instead of regulated and stable assets like Gold. However, suppose the demand for digital currencies continues to rise. In that case, the chances that it will continue to be a preferred mode of payment will also rise, as it will mean that its adoption will also be on a high, as they will be many users willing to trade with Bitcoin instead of Fiat currency. However, the above argument negates the Economist’s opinion, regardless of the unstable nature of the price of the digital assets.