Steve Hanke, Professor of Applied Economics at Johns Hopkins University, has once again taken his tough stance on cryptocurrencies and urged investors not to trade Bitcoin as it is a valuable asset that is highly speculative and with no fundamental value.
Steve Hanke – famous economist
Is Bitcoin Really a Scam?
Steve Hanke is a well-known crypto critic and he recently did warning Investors avoid Bitcoin and call it a “scam” the “crypto bulls sell”:
“Extreme volatility, ease of cheating and uncertainty are all reasons why Bitcoin will never be suitable as a real currency.”
While Bitcoin actually has price volatility, it’s still a relatively new asset and could fix this in the years to come, especially if it’s properly regulated. SkyBridge Capital CEO Anthony Scaramucci recently compared Bitcoin to Amazon, recalling that the e-commerce giant was also unstable in its early days but is now one of the most influential:
“Bitcoin is very volatile because it is in the early stages of adoption. Amazon faced a similar situation 24 years ago. If you had invested $ 10,000 in Amazon when it went public, you would now have $ 21 million. “
Hanke came to the conclusion that Bitcoin is a “highly speculative asset with an underlying value of zero”. His point is reasonably correct here, as Bitcoin, like most investments, is a tool of speculation. Some traders and investors use its volatility to generate profits. However, there are also those who prefer to keep it because they believe it is a valuable digital asset. Famous owners here are Paul Tudor Jones III and Stan Druckermiller.
At the same time, large corporations such as Tesla and MicroStrategy have invested in no small part in Bitcoin. Although Hanke claims that Bitcoin has a fundamental value of zero, it saw a major event this year where El Salvador accepted it as its legal currency.
Is Bitcoin Fraud and Uncertainty?
As noted above, Hanke previously objected to the move by El Salvador, who spoke of Bitcoin’s vulnerability and insecurity as part of the controversy in the past. However, Bitcoin’s blockchain is completely transparent, all transactions are recorded in a digital ledger and can be viewed by anyone with internet access.
Although there are still reports claiming that some villains are already using Bitcoin to launder money and engage in illegal activities, the nature of cryptocurrency makes it a very unsuitable tool for those who wish to use it.
It is difficult to speculate what exactly Hanke meant by his “unsafe” comment on Bitcoin, as he did not provide any further details. However, the Covid 19 pandemic caused extremely high levels of uncertainty in all financial markets and even in all areas of life last year. During this time, the value of Bitcoin against the dollar has risen many times over, while the greenback itself – the world’s reserve currency – has been devalued.
As for the currency failure argument, recently a $ 2 billion transaction in Bitcoin was moved from one address to another and the transaction cost less than $ 1. It means that someone has transferred a whole fortune in a matter of minutes without the need for a third party. Such a transaction using traditional methods such as banking or PayPal would be significantly more expensive and slower.
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According to Cryptopotato