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Bitcoin’s push to respectability could raise its value to five digits within months, argues David Jinks, Head of Consumer Research at e-commerce fulfilment experts ParcelHero
Cryptocurrencies are no longer the rebels of finance. Of course, in their youth they grew in value because of their usefulness on the dark web. Jamie Dimon, CEO of JPMorgan said as recently as September this year: ‘If you were a drug dealer, a murderer, stuff like that, you are better off doing it in Bitcoin than U.S. dollars.” But this talk may be well behind the times.
Today Bitcoin, at least, is fast becoming mainstream. It’s turned off the Silk Road and onto Wall Street. The long-established US-based exchange CME is set to introduce Bitcoin futures contracts this quarter, subject to regulatory approval.
Just look at how respectable Bitcoin is prepared to behave to boost value. It’s prepared to go along with CME’s Leo Melamed’s announcement that ‘We will regulate, make Bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules.’
Respectable institutional investors are becoming attracted to a currency that is outside any national regulation or interference: and the value of the existing Bitcoins will rise as its respectability rises.
When Jamie Dimon made his drug dealer comments this September, a Bitcoin’s value fell back to $2,900; but news of CME’s futures – and possible adoption by e-commerce giant Amazon – sent values soaring to $7,500 this month.
But it’s also the fact that Bitcoin isn’t yet quite respectable that adds some value. The coup (and it so is a coup) in Zimbabwe this week panicked investors there. What did they buy that they could be sure wouldn’t get sucked into the quagmire of Zimbabwe finance and politics: Bitcoin. Precisely because Bitcoin is independent of national states and banks it was suddenly seen as a safe haven. The cryptocurrency climbed 10 per cent on Zimbabwe’s Golix.io exchange as chaos hit Zimbabwe’s financial markets. Bitcoin’s value rose as high as $13,499 at one point. Now who’s laughing at the prospect of a $10,000 Bitcoin?
Of course, £13,500 is almost double the rate at which Bitcoin trades in international markets, and Zimbabwe’s cryptocurrency trading model is complex, with LocalBitcoin brokers trading the digital currency for significantly less. But it raises an interesting point. The UK’s Financial Conduct Authority (FTA) has rightly issued a warning about the risk of Initial Coin Offerings (ICOs). Investing in cryptocurrencies, whether the positively middle-aged Bitcoin or a newly minted currency is all risky to varying degrees. But come a crash in Zimbabwe, or for that matter The City or Wall Street, what can you invest in that isn’t tied in to the financial glue of state?
Cryptocurrencies such as Bitcoin may be wearing a shirt and tie – but they are not establishment. That’s probably a good balance.
You can read about why Forbes fintech expert Roger Aitken believes it’s time for investors to join the cryptocurrency party at: https://www.parcelhero.com/blog/news-updates/amazon-embraces-bitcoin
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.