It would appear that Bitcoin and other cryptocurrencies have been increasingly garnering flak these days, as negative commentaries from both digital experts and prominent investors have been making headlines as of late.
Drawing an explicit contrast between Bitcoin and blockchain, one influential investor recently noted that cryptocurrency is no more than a quasi-currency that will more or less eventually lose its value completely.
In an interview with CNBC published January 23, blockchain-based investment firm BCG Digital Ventures founder Jeff Schumacher explained that while Bitcoin has so far captivated the interest of the public as a nascent technology, he remains skeptical when it comes to the digital assets’ value as a currency, explaining that:
“I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything.”
In yet another recent interview with the CNBC panel, North Island chairman Glenn Hutchins also shared a similar perspective, claiming that as an investor, his focus leans more towards blockchain technology.
As Hutchins elaborated:
“I am much less interested in investing around bitcoin as a currency unit or a currency equivalent, or even the blockchain as an accounting ledger. I am thinking much more about the protocols. In other words, what is the underlying protocol going to do as a consequence of which, which tokens are valuable or not.”
While Bitcoin may not have received the same amount of optimism among prominent investors compared to blockchain technology, it would be difficult to shrug off the fact that these nascent technologies remain largely interlinked.
Discussing the relationship between Bitcoin and blockchain, “Let’s Talk Bitcoin” podcast host and crypto proponent Andreas Antonopoulos underscored that without Bitcoin, blockchain technology cannot stand on its own, further driving his point by describing blockchain as “Bitcoin with a haircut and a suit you parade in front of your board.”
As Antonopoulos explained further:
“Blockchain is one of the four foundational technologies behind Bitcoin and it can’t stand alone. But that hasn’t stopped people from trying to sell it. Blockchain is Bitcoin with a haircut and a suit you parade in front of your board. It is the ability to deliver sanitized clean comfortable version of the blockchain of Bitcoin to people who are too terrified of actually disruptive technology.”
Another longtime fixture in the cryptosphere has also expressed similar apprehensions over Bitcoin. Referencing the general comments during the World Economic Forum (WEF) in Davos that blockchain has so far succeeded where Bitcoin has failed, Hong Kong-based finance and tech journalist Joseph Young précis these views, stating that:
“Airplanes will go to zero while engines have potential.”
Apart from major investors, a number of distinguished analysts who remain largely uninvolved in the crypto sphere also shared the same pessimism, surmising that “BTC will go to zero” sooner or later.
As Allianz chief economic adviser Mohamed El-Erian forecasted in 2018, while he still believes that the crypto market will withstand the prevailing bear market, it will not be as dominant as it once was, stressing that:
“I think cryptocurrencies will exist, they will become more and more widespread, but they will be part of an ecosystem. They will not be dominant as some of the early adopters believed them to be.”
As it stands, the banking sector still largely relegate digital currencies as no more than “fake money,” while regulators across the globe remain ambivalent whether or not cryptocurrencies should be legitimized as a legal tender. However, should the nascent technology eventually gain mainstream adoption, it might just finally earn that much-needed recognition from the traditional finance industry.