Bitcoin could be worth absolutely nothing according to analysts working for banking giant Morgan Stanley. If nobody considers the digital currency as a rival to the US dollar or other fiat currencies then, they warned, then it’s virtually worthless.
“If nobody accepts the technology for payment, then the value would be 0,” analyst James Faucette and his team wrote in a note to clients adding that the cryptocurrency is tiny compared to other more traditional financial instruments. “Bitcoin average daily trading volume of $3 billion vs $5.4 trillion in the FX market, estimated $300 million in daily purchase volume vs. $17 billion for Visa.”
Coinmarketcap data says Faucette’s numbers are not correct as it reveals that as an average daily volume of bitcoin is $11.5 billion while the whole cryptocurrency market’s daily volume is almost $27 billion. But incorrect data aside, Faucette and his team do have a point. If no one wants to accept cryptocurrencies as a mode of exchange, they might as well be virtual funny money.
That being said, the same concept applies to all modes of payment be it fiat currency or even gold. They have value because people give them value, but unlike gold, Bitcoin doesn’t have any intrinsic use nor is it a tangible substance.
But even if merchants start refusing the digital currency as a mode of payment due to its inherent volatility, it can still be exchanged to fiat currency. Focus would then shift from the…
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