Bear market or winter market for Cryptocurrency loyalists, BTC continues to be the gleaming currency and not an encrypted digital cash form factor. Arguing their case that BTC is today as prolifically bought and used as the iconic yellow-glinted metal, these BTC natives vouch for the non-fiat currency’s true value
Max Keiser calls it gold’s equivalent
As cryptocurrency markets continue to struggle in the bear markets, cryptologist and industry leader, Max Keiser’s has made some resounding impact among those who doubted the resilience of the
In his latest tweet, he calls Bitcoin as the “peer-to-peer electronic gold system.”
Subsequent tweets he attributed more emphatic adjectives to this scintillating Industry – world-changing and unparalleled digital gold.
Why is BTC being equated to Gold?
In a much-debated explanation by Dan [email protected] dan Hedl, the focus is that BTC is the “gold” without the glisten essentially because the very nature of the Bitcoin whitepaper makes reference to Satoshi Nakamoto himself defining his brainchild as “scare,” and suggests that “Bitcoin’s scarcity gives it value… as a SoV.”
Held tweeted “What he was trying to accomplish was clear, he wanted to build a new backbone for the financial system. Bitcoin isn’t merely digital cash, but an alternative to banks… People pushing the MoE narrative at this moment in time are counterproductive to adoption. By creating these expectations, which are unattainable at the moment, many people will get burned or disillusioned.”
Taking the discussion forward on Thursday was Australian-researcher – Willy Woo @woonomic who said, “This is the reason why I think Bitcoin will easily exceed golds market cap. *Mathematical scarcity beats perceived scarcity* Perceived scarcity comes only from the technological limitations of today.”
Woo proposes that Gold is the standard for store-of-value will eventually lead to scarcity, driving many to reach the outer space for gold.
Backing Woo’s argument was Misir [email protected]_mahmudo, who proposes that “If every millionaire in the US wanted to have just 1 bitcoin they wouldn’t be able to. There will always be fewer bitcoins than there are millionaires in the US (let alone the whole world).”
Criticism of scarcity theory
While pro-crypto and BTC are positive that the above argument is rational and correct with respect to building value for the cryptocurrency, there is widespread criticism to the argument, Chainalysis, the research agency for all things cryptocurrency states that “That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity. Yet the market has adapted to the actual demand and supply available – just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates.”