A Kenyan communications strategist, Mwotia Ciugu, has informed African buyers to be cautious of investing in bitcoin which he claims is value zero.
Bitcoin Structurally Incapable of Delivering on Its Promise
In an op-ed revealed by The Elephant, Ciugu insists bitcoin (BTC) is structurally incapable of delivering on its promise of turning into another retailer of worth or a hedge towards inflation. As well as, the strategist additionally claims bitcoin fails each as a forex and an funding.
Though he concedes that Africa has one of many highest cryptocurrency adoption rates, Ciugu cautions, nevertheless, that the highest cryptocurrency’s volatility and scalability points imply it can not act as a forex. Ciugu is quoted explaining:
Bitcoin fails as a forex due to two issues: volatility and scalability issues. In its 12 years of existence, bitcoin has maintained extraordinarily excessive ranges of volatility i.e. 60 per cent to 100 per cent annualized.
To additional help this level, Ciugu makes reference to the U.S. greenback which he claims “has an annualized volatility of 17 [percent].” In regards to the crypto asset’s scalability issues, Ciugu predictably regurgitates the widespread arguments about bitcoin’s inefficient use of electrical energy and the way this disqualifies it as a forex for day-to-day transactions.
Bitcoin Helpful for Cross Border Remittances
In the meantime, the strategist denies that bitcoin is now getting used extensively in El Salvador, the primary nation on this planet to declare bitcoin authorized tender. In accordance with Ciugu, the U.S. greenback continues to be the dominant forex in El Salvador. Regardless of placing ahead these arguments, Ciugu surprisingly agrees that sending remittances by way of bitcoin is less expensive than utilizing common sending channels. He defined:
Using bitcoin in that nation is primarily for remittances by residents working overseas to their households again house. These residents depend on bitcoin for cross-border cash transfers to keep away from the excessive prices that include such transactions, and in addition as a result of most residents of El Salvador, i.e. 70 [percent], don’t have financial institution accounts.
On why he thinks the cryptocurrency is value zero, Ciugu makes use of billionaire investor Warren Buffet’s past comments about bitcoin to argue his level. In his earlier remarks, Buffet had intimated the crypto asset had hallmarks of a pyramid scheme as a result of it produces nothing. Similar to Buffet, the strategist additionally believes bitcoin buyers don’t have any expectations of creating any future earnings besides by means of partaking in zero-sum video games with different speculators.
The strategist additionally makes reference to how bitcoin crashed when Elon Musk voiced his issues concerning the crypto asset’s energy use. Such a response in accordance with Ciugu means bitcoin is extra prone to sentiments than precise fundamentals.
The strategist ends this lengthy article by conceding that bitcoin will most likely hit the US$100,000 mark within the close to future as some analysts are predicting. Nevertheless, Ciugu argues that even when bitcoin have been to succeed in such a milestone, it will have “no bearing on the intractable truths” he has articulated.
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