As a seasoned analyst with over two decades of experience in financial markets, I have seen my fair share of bubbles and busts. The cryptocurrency industry, particularly Bitcoin, presents a unique challenge that I find intriguing yet perplexing.
In simple terms, the head of the U.S. Securities and Exchange Commission, Gary Gensler, has depicted the crypto industry as riddled with deceitful individuals, using words like “con artists” and “swindlers”.
Last month, the SEC boss also warned that the industry was not going to “persist” without following the rules.
Not a currency
Gensler has additionally expressed skepticism about the likelihood of Bitcoin becoming widely accepted as a method of transaction.
Instead, Bitcoin will be treated as a store of value, according to the SEC boss.
The enigmatic inventor of Bitcoin, Satoshi Nakamoto, considered Bitcoin as a decentralized digital payment solution or a “people-to-people money system.
2013 saw a significant increase in merchants adopting Bitcoin as a form of payment, with BitPay, a major crypto payment processor, observing this surge. However, this trend didn’t persist for very long.
As an analyst examining the crypto market, I’ve observed that despite Bitcoin being initially proposed as a substitute for the US dollar and traditional currencies, it hasn’t managed to secure substantial merchant adoption yet. In fact, data from 2017 showed a decrease in the number of merchants accepting Bitcoin compared to the year before, according to Morgan Stanley’s findings.
High costs and sluggish transactions have been identified as the primary challenges that make Bitcoin less appealing as a method of payment. Furthermore, its volatile price is one of the major factors causing merchants to hesitate in adopting the dominant digital currency.
It appears that the Lightning Network, initially introduced as a means to address scalability issues, hasn’t managed to attract widespread adoption. Centralized payment systems, known for their efficiency, have significantly decreased the need for cryptocurrency transactions.
After that, proponents of Bitcoin have shifted their argument towards viewing it as a “digital equivalent of gold,” emphasizing its role as a long-term investment or store of value. This perspective is still prevalent today, with significant investors like MicroStrategy amassing their holdings.
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2024-10-10 09:29