Everyone is talking about cryptocurrency. There are talks about this form of currency replacing traditional systems. Others believe it’s only a fad and will eventually fade. Will cryptocurrency like Bitcoin survive? Are we seeing only the tip of the iceberg?
The potential downfall
We know that cryptocurrencies are unstable. The value rises and falls constantly. These are sharp turns too. When the value is beyond control, it’s harder to earn more people’s trust. Apart from those who already invested in cryptocurrencies, the rest will be hard pressed to give them a shot.
Another reason why it might not survive is the potential government regulation. Transactions using cryptocurrencies are usually anonymous. Anyone can make payments without revealing personal information. It paves the way for illegal transactions to flourish. Governments around the world are starting to crack down on some aspects through regulations. They might eventually forfeit the purpose of using cryptocurrencies in the first place and turn off potential users.
There are also more people speaking out against Bitcoin and other cryptocurrencies. Elon Musk, for instance, said that Tesla won’t accept payments using this method anymore due to concerns about the environment. UK banks also blocked payments with the use of crypto exchanges. Even IMF sent warnings against using cryptocurrencies as legal tender. The organization warned that it might threaten the economy’s stability and integrity.
The good news
While the negative stories could spell the end of cryptocurrencies, there’s good news too. For instance, Morgan Stanley was the first big US bank to offer Bitcoin funds to wealthier clients. While there are restrictions, the acknowledgment of the currency is a big step. Amazon, one of the largest companies in the world, started a job ad that states “Digital Currency and Blockchain Product Lead.” Some people think that it might lead to the acceptance of Bitcoin payments in the future. There are also some countries that think about using to acknowledge cryptocurrencies as official legal tender. When more countries do the same, others might follow.
Will the bubble burst?
With the rapid increase or decrease in value, there’s fear that the bubble will eventually burst. Some investors who were first in believing in the cryptocurrency might pull out and affect the rest. The influx of new investors could also pave the way for the sudden increase in value. It could be the reason behind the crash. The point is anything can happen and it’s an unstable currency.
There were several speculations about when and how cryptocurrency would end. Despite that, it’s still alive. Even financial experts don’t agree about the future of cryptos. It shows that anything can happen. Regular people who are thinking about investing in them have to think long and hard before making that step. It’s crucial to study first before deciding to take the plunge. It’s not the same as regular currencies accepted worldwide. You have to take extra caution if you don’t want to face problems when using it.
1st and featured image from https://online.jwu.edu/sites/default/files/styles/article_feature_page/public/field/image/Crypto%20-%20tiny.jpg?itok=Srvi1wMW
2nd image from https://www.fool.com/investing/2018/08/20/heres-how-much-these-14-top-cryptocurrencies-have.aspx