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David Marcus believes that Bitcoin can be considered to be digital gold and has given bullish indications as to where Bitcoin is going.
In what seems to be both a conflict-of-interest and also an effort to promote his cryptocurrency, the head of cryptocurrency projects at Facebook David Marcus has given bullish indications as to where Bitcoin is going. He also indicated that Bitcoin doesn’t fit into the cryptocurrency asset class as well giving his bias for the Libra cryptocurrency.
David made this known at the recent New York Times DealBook conference last week. He also said that Bitcoin has more qualities as an asset than as a medium of exchange. He noted:
“I don’t think of Bitcoin as a currency. It’s actually not a great medium of exchange because of its volatility. I see it as dogital gold.”
This, of course, correlates with the descriptions of others within the financial and technological sectors who have compared Bitcoin to gold due to its volatility and perceived value globally. Some have even gone on to even predict that Bitcoin will replace gold in terms of market capitalization given its trustless nature and exponential price increases. Bobby Lee is one of those who think so.
Bitcoin currently has a market capitalization of about 160 billion while gold is 50 times more valuable at $8 trillion. This, of course, coincides with David’s’ position on Bitcoin being digital gold.
“People don’t use a unit like digital currencies of Bitcoin to pay for things just because it’s so volatile. It serves a completely different purpose,” stated Marcus. “It’s an investment class that’s decorrelated from the rest of the market,” added he.
Of course, being the first of the cryptocurrencies, Bitcoin has had a volatile existence since inception. After the whitepaper describing the functionality in what is now known today as blockchain technology by an anonymous hacker known as Satoshi Nakamoto, Bitcoin has grown as an asset that has outperformed almost all other assets both physical and digital in human history.
Priced at about $0.03 a decade earlier to an all-time high of $20,000 in 2017 which of course was the period where the cryptocurrency saw tremendous gains due to a bubble effect at play. This represented an almost 666,666,567% jump with room for an exponential increase in prices after price reversals in 2018 and a market rebound this year following the interest of technology companies in the underlying blockchain technology and other Distributed Ledger Technologies which drive the crypto space.
Big technology, on the other hand, has always wanted to play around with finance and the new era of decentralized finance also presented new opportunities for entry into the finance world. Projects such as Facebook’s Libra have been considered as the way to go by many but governments have regarded such projects with skepticism.
This has led to proponents in the United States Congress to put forward the Keep-big-tech-out-of-finance act which is designed to separate technology companies from the financial sector.
This has also slowed the progress of Facebook’s Libra project which has seen organizations that formed the umbrella of the Libra organization pull out due to regulatory pressures and privacy concerns amidst other things.