Everyone seems to be talking about cryptocurrencies like Bitcoin now that it becomes hot. And everyone has an extreme opinion about it: they either love it or hate, but no one seems to ever be ambivalent about it. Based on blockchain technology, the allure of such virtual money is that it is anonymous.
And therein lies the problem. Detractors say that it is unregulated, a haven for criminals to hide their money and activities, and a bubble just waiting to burst. The cryptocurrencies are not based on anything tangible, say critics, and their anonymous mass investors can bring down the market at any time when they choose to cash out.
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But Bitcoin enthusiasts see it as an alternative to traditional currencies. They believe that, as with anything, bitcoin is only worth what people are willing to pay for it. They say that like with gold and silver cryptocurrencies can be a safe haven for your money when economies crash.
Bitcoin is the highest cryptocurrency in value and has been volatile over the years. It crashed three years ago after breaking the $20,000 mark for the first time. But it reached $35,000 at the start of 2021, only to drop again. It is currently trading at just above $30,000, but this is still about three times its value at the start of 2020.
CNBC has explained the rise in demand for Bitcoin and other cryptocurrencies as resulting from bulls who see increased demand from institutional investors, pitching bitcoin as a hedge against inflation like gold amid the unprecedented U.S. coronavirus stimulus.
But who is right? Is it a smart investment, or is it just another bubble based on people’s fears of missing out? The world’s billionaires cannot even agree to the answer to that question.
The head of JPMorgan head is no fan of Bitcoin. Expressed his concerns last November when speaking to the New York Times DealBook Summit last November. Dimon said that bitcoin “just not my cup of tea.” He is also of the opinion that cryptocurrencies will soon be regulated by governments like all commodities. This would put all holders of cryptocurrencies under scrutiny and allow market forces to affect its value which would result in Bitcoin’s depreciating.
And back in 2017 he compared the Bitcoin craze to the Dutch tulip craze. Dimon called it a fraud that would eventually burst like all bubbles and said that it is “worse than tulip bulbs.”
But he does see a future for Blockchain in general. “The blockchain itself will be critical to letting people move money around the world cheaper,” he said at the New York Times DealBook Summit. “We will always support blockchain technology.”
The billionaire investor is also a no on Bitcoin. He once told CNBC, “I don’t like the cryptocurrencies only because, maybe I don’t understand them.” But then he added, “”I wouldn’t touch that stuff.” Icahn said that there is a problem with how to regulate blockchain.
Jeff Bezos is not on the Bitcoin bandwagon. He has no plans of letting Amazon accept Bitcoin as a form of payment. Bezos has reportedly never invested in Bitcoin.
The billionaire founder and head of Equity Group Investments, a private investment firm, does not like Bitcoin. In an interview with Kiril Sokoloff on Real Vision Zell said. “I am very skeptical, frankly, of bitcoin. Ultimately, it may be the answer or one of the answers. But right now, it’s a world that’s extraordinarily populated by chameleons and other fast-talking characters. I don’t believe everybody involved in it are the kind of people I’d like to follow.”
When still a presidential candidate the former New York City mayor called for regulating cryptocurrencies. “Cryptocurrencies have become an asset class worth hundreds of billions of dollars, yet regulatory oversight remains fragmented and undeveloped.”
Mike Bloomberg also said that the cryptocurrency market is ripe with corruption. “For all the promise of the blockchain, Bitcoin and initial coin offerings, there’s also plenty of hype, fraud and criminal activity,” he said.
Mark Cuban has said that he will run for President of the United States should Bitcoin ever break $1 million in value. The remarks came when the cryptocurrency broke the $35,000 mark for the first time. The obviously sarcastic remark was meant to show that he does think that Bitcoin will continue to rise in value.
The owner of the Dallas Mavericks tweeted, “I’ll run if BTC gets to $1m AND we can get commitments to donate 350 BTC to the Treasury each of the 4 yrs so that we can give 1 satoshi to every citizen each yr, that they must hold for 10 years.”
Mark Cuban has never been a fan of cryptocurrencies. Cuban sees it as a fad with no intrinsic value. He once told Forbes, “It’s a store of value like gold that is more religion than solution to any problem. No matter how much BTC fans want to pretend that it’s a hedge against doomsday scenarios, it is not.”
The Pro Bitcoin Billionaires
The founder of Tesla loves Bitcoin. A few weeks ago Ben Mezrich, the author whose book was the basis for the movie The Social Network and writer of Bitcoin Billionaires tweeted, “I’m never turning down getting paid in bitcoin again.” To this the world’s current wealthiest man responded with two simple words: “Me neither.”
Last year Elon Musk made waves when he said that he would even like to be able to have his electric car company Tesla add bitcoin to its balance sheet. In December he tweeted, “Bitcoin is my safe word.” And Musk, who is working with Space X to launch a mission to Mars, has also said that bitcoin could someday be the currency used on that planet.
— Elon Musk (@elonmusk) December 20, 2020
While not saying much about Bitcoin specifically, the founder of Facebook is clearly high on the concept of cryptocurrencies in general. Facebook has even established its own cryptocurrency called Libra.
Facebook has also established Novi, originally called Calibra, which offers a digital wallet which will provide Facebook users with a place to keep their Libra currency. Novi’s tagline is, “a connected wallet for a connected world.”
Libra calls itself a simple global payment system and financial infrastructure that “empowers billions of people.” The company says that its goal is to provide people everywhere access to safe and affordable financial services.
Larry Ellison is the co-founder of Oracle. He seems to have mixed feelings about blockchain. He may not be a fan of Bitcoin but Oracle has its own service to help businesses use it.
Amit Zavery, senior vice president of Oracle Cloud Platform, said at the time that, “Blockchain holds the promise to fundamentally transform how business is done, making business-to-business interactions more secure, transparent, and efficient.”