The trader who closed his short position after bitcoin fell 80 percent last year doubts whether the flagship cryptocurrency will ever attain a broader adoption.
Bitcoin-Short Trader Bearish on Future of Crypto Adoption
Mark Dow, a former International Monetary Fund (IMF) economist, said in a tweet that the world’s leading digital currency “lacks a credible use case” to withstand the bearish sentiment. He discredited bitcoin‘s potential of becoming a store of value asset, stating that those who make these claims are delusional and scammy.
I’ve yet to hear a positive, credible use case for #bitcoin. Plus, I see a lot of delusional arguments & scammy promotion. However, truth is I know v little about it. What I do know is it has been highly tradeable based on patterns, and I suspect it will continue to be. $BTC $XBT
— Dow (@mark_dow) January 2, 2019
The community presented Dow with evidence of bitcoin’s use cases in cash-strapped economies like Venezuela, where the economically underfed citizens have started opting for digital currencies against their hyperinflated national currency, the bolivar. Dow rejected these lines of argument, saying that Venezuelans cannot use a “currency” which goes down 80 percent in a year — even if it can go 200 percent up in correction.
“It becomes speculation, which is not the use case Venezuelans are looking for,” he argued. “They need safety and stability. I’m surprised this does not seem obvious.”
Bitcoin is More than Currency
I’m sure it can become a lot of things. I will leave that to you visionaries. It’s just not there now. Sure, someday maybe it goes to 100k–or maybe not–but for now, still too volatile, too sketchy, too scammy, too convoluted for broad-based adoption IMO.
— Dow (@mark_dow) January 3, 2019
In its original whitepaper, bitcoin creator Satoshi Nakamoto called it a “peer-to-peer version of electronic cash” which would allow online payments to be sent directly from one party to another without needing a financial institution. The early adopter, recovering from the then-latest recession, bought the idea of a state-agnostic global cryptocurrency whose supply would be governed by mathematics — not by governments and central banks. It projected bitcoin as an alternative to the US Dollar, a global currency reserve allegedly responsible for manipulating global finance.
The evolution of bitcoin saw its use cases changing according to its users. Some used it as currency to settle online transactions, while others speculated on it as though it was a stock or commodity. Overall, bitcoin proved that it possesses the quality of almost every mainstream financial asset which even made it difficult also for regulators to categorize it properly. The Reserve Bank of India, for instance, briefly explained why it could not regulate bitcoin because the digital currency couldn’t fit any definition given in the constitutions.
Dow’s arguments treated bitcoin like a currency — a common perception — without dwelling into the viewpoints of others. A stock, for instance, could also fall more than 80 percent in a year but it cannot be seamlessly transacted to other parts of the world like bitcoin. That is where the cryptocurrency becomes more than the definition of a stock, a currency, or a commodity. The technology is multifaceted — it’s that simple.
Mark Dow: Why Not Just Use US Dollar?
In one of his follow-ups, Dow asked that why Venezuelans could not use the US dollar instead of bitcoin. The answer is: control. The Trump-led US government has choked the country’s finance with its economic sanctions owing to political turmoils. The US dollar has become a mere political tool to control a nation, its government, and people.
Why does the US dollar hold any value? Because the world believes it does and allows it to control every aspect of the global economy. But beliefs can change with time. China and Russia are already taking steps to beat the global hegemony enjoyed by the greenback. Europe’s central banks are replacing the dollar with their own euro bills to settle trades and cross-border payments. Sanctions-hit countries like Iran are accepting Indian rupees for their oil exports to India.
As far as bitcoin is concerned, it is a very expensive experiment that has been running well for the last 10 years. Speculation is a game for humans; let the technology be.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.
Featured Image from Shutterstock. Charts from TradingView.
