Are cryptocurrencies here to stay or are they on the verge of collapse?
There are several noted publications that are trying to profit off of scare tactics around cryptocurrency’s impending doom, saying that bitcoin is going to zero in the near term.
Of course, nothing could be further from the truth because all you have to do is look to legitimate financial institutions, including the IMF no less and Christine Lagarde, who have made several statements regarding the efficacy and legitimacy of cryptocurrencies—in particular Bitcoin and Ethereum.
A few months ago, the Chicago Mercantile Exchange (CME) launched futures contracts for bitcoin. This would not be happening unless the financial powers to be believed in the future of cryptocurrencies and believed that cryptocurrencies are here to stay.
The CME then followed up on that action, launching yet another cryptocurrency futures contract, this time for Ethereum. Now you have two of the major cryptocurrencies, Bitcoin and Ethereum, both being traded through a regulated exchange. Not any exchange, a government-regulated exchange is trading both Bitcoin and Ethereum futures contracts.
That is legitimizing cryptocurrencies.
Now you hear that The New York Stock Exchange, according to The New York Times, is considering letting customers buy and hold Bitcoin. They would do so through some sort of a swap investment vehicle that would settle in a couple of days, in Bitcoin. I won’t go into all those details because up till now it’s just hearsay—but stay tuned.
Also, Goldman-Sachs said that they would be looking at issuing Bitcoin futures within weeks, according to The New York Times. We don’t know if any of this is true but it’s something to watch for.
We do know that the Chicago Mercantile Exchange does indeed issue futures contracts for Bitcoin and Ethereum. It is not a surprise that the U.S. Stock Exchange is considering doing something similar.
All of this going on day-by-day, week-by-week further legitimizes cryptocurrencies and yet, you’ll still hear from the likes of Warren Buffett, equating Bitcoin to rat poison.
When Warren Buffett makes those statements, he’s doing it as a way to contrast his entire investing career (around value-based investing) against a digital currency that has no inherent value in and of itself.
You have to understand the context within which he’s commenting. If I were a betting person, I would take Warren Buffett’s comment with a grain of salt. I would certainly discount several financial publications that are trying to scare people out of cryptocurrencies. I would also pay attention to what the financial institutions in this country (the United States) and around the world, including the IMF, are doing—not what the critics are saying.
We ain’t seen nothing yet. Cryptocurrencies are here to stay. As time goes on, I (Bill Poulos) believe that we’re going to see cryptocurrencies become more and more legitimized, playing a greater and greater role in the economies of the world.