I am optimistic about Bitcoin.
As the year closes to an end, price projection for bitcoin has ranged anywhere between an outrageous $500K by 2025 to a more muted $40K at the end of 2021. These forecasts are hard to ignore because they are made by increasingly established figures such as Catherine Wood, the Founder and CEO of Ark Invest, and Tom Fitzpatrick, Citibank’s global head of CitiFX Technicals.
Self-professed pundits littered social medias with emotions-stoking blog posts and video content, all of which contained some sort of disclaimer and absolution of responsibility.
“Investing is and always will be one’s responsibility.”
While it is entertaining to indulge in these feel-good forecasts, I have a nagging thought that I might become biased over time. The danger of soaring crypto-sentiments and prices is in the confirmation of this bias, which may encourage false optimism and lead one to make irrational behaviors and decisions.
Worse, confirmation bias may cost one to take over-leveraged or overly risky positions that he, and perhaps family and friends included, could ill afford.
Whichever side of the fence one is from, it makes logical sense to see the bigger picture with little to no prejudice. Bitcoin critics play important roles in this regard.
Of course, Bitcoin proponents deserve to be heard too, but I consider them a bunch too many. The critics, on the other hand, seem to be a rare breed and therefore a tad more precious.
So go ahead, follow these personalities on Twitter and hear what they have to say. Test your conviction — or faith — if you will.
First up the list is Nouriel Roubini, a Turkish-born American economist, chairman of an economic consultancy firm, and professor at New York University. He is most famously known for accurately predicting the 2007–08 financial crisis.
Now, he is making a name in the crypto space by being one of the fiercest and longstanding critics of cryptocurrencies.
During a panel hosted by LaToken on Jan 25, 2019, Roubini has stated that blockchain is “no better than an Excel spreadsheet” and referred to the technology as “the most overhyped technology ever.”
He warned that Bitcoin, along with other altcoins, is mother of bubbles waiting to pop. He also compared tokenisation to the system of bartering, ruled out the involvement of blockchain or crypto in DLT and CBDC, and believes that CBDCs will dominate fintech instead of blockchain and crypto.
He has since softened his stance and expressed some doubt on his previous comments.
“[Bitcoin is] maybe a partial store of value, because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time, because for most of those other ones, literally, is done ad hoc, and they’re being debased faster than what the [U.S. Federal Reserve] is doing,” Roubini said in a Yahoo Finance interview
This came hot on the heels of Bitcoin’s rally climbing over 40% in the last month as evidence of institutional buying, Wall Street attention, high profile support, and central bank involvement proved too overwhelming to ignore.
Second on the list is Peter David Schiff, an American stockbroker, financial commentator, and author of several books of the finance/business genre including, “Crash Proof: How to Profit From the Coming Economic Collapse.”
His involvement in the subject area of macroeconomics is marked by his staunch opposition to the federal income tax and Right-leaning support for the capitalist free market.
In the arena of cryptocurrency, he is dubbed the “Gold-bug” who is not afraid to vocalise his disdain for Bitcoin. He has remarked that he sees Bitcoin as resembling a tulip mania bubble, a popular referenced used to describe the dot-com bubble of 1995–2001 and the subprime mortgage crisis.
In an interview with Joe Rogan, Peter Schiff’s argument against Bitcoin as a currency largely stemmed from the digital asset’s lack of intrinsic value and high volatility.
“Everybody is talking about it now, it’s all over the place, yet the price doesn’t go up anymore — stop going up a few months ago. When everybody found out about it and everybody’s talking about it, it went flatline, right, side ways.
“Now, somebody could say well, its forming a base, getting ready to have another rally, or this could be the top, this could be the distribution top and the market can fall out.”
“Even the people who own Bitcoin they don’t know for sure which way its gonna go — its a gamble.”
Schiff once very succinctly put his stand: Bitcoin’s assigned value is based on the belief/potential that somebody else also wants bitcoin, while the value of gold is in itself.
If you are one with a taste for altcoins, you may want to hear what Max Keiser has to say. Maxwell Keiser is a film director by profession and hosts a TV show named “Keiser Report,” where he broadcasts his heterodox economics theories.
Unlike the above traditional cryptocurrency critics, Max Keiser is a Bitcoin maximalist who predicts that Bitcoin is heading to 80% dominance and that “alts die in favour of BTC.”
In his own words, there is nothing or no coin that can do what bitcoin does not do already or will do shortly. This includes notable altcoins with huge market capitalisations like ETH and XRP, which Keiser dismisses as exit scams.
Boiling down the purpose of Bitcoin, Keiser asserts that Bitcoin owners are essentially buying security. “Bitcoin is the only way to achieve individual sovereignty.” In the same vein, he claims that altcoins are bound to fail because they are “completely useless” with “no use case” and “no purpose.” This proposition aligns with the 2017 ICO experimentation/explosion, which saw most ICO tokens crashing in market value even though all of them had the same message that they work better than bitcoin.
A compelling analogy made by Keiser points to the internet and email protocol. Similar to the internet and email, when a protocol is entrenched and therefore ubiquitous, there is a slim probability that it will ever be replaced by other better protocols. If history repeats, as it usually does, Bitcoin dominance is never going to change.
Max Keiser presents us with a grim future for altcoins as failed competitions of Bitcoin.
I, like many others, have decided to ride the recent bull market. The $14K rally of Bitcoin since April, plus the institutional recognition and buying have convinced me that Bitcoin is here to stay.
Bitcoin’s potential is immense, and it is still not too late to have a piece of that pie.
To do that is as easy — or difficult — as riding out the volatility and emotions that come with it. Stay committed to your investment plan and refrain from detracting from it after reading a blog post or watching a random YouTube video. If it helps, write your investment plans down and stay true to them.
It does not hurt to keep one’s potentially lofty get-rich-quick investment ideas grounded with these Bitcoin critics, at least not until he is too far gone.