Bitcoin dominates another quarter in 2019; Are skeptics changing their tune about BTC?

  • 30 June 2019, Sunday, 10:30

Over the years, Bitcoin has had its share of active criticism from economists and people in the financial sector. Some analysts considered the volatility of Bitcoin to be extremely inconsistent, whereas others suggested that the virtual asset had no “intrinsic value.” In short, Bitcoin did not have an easy path in terms of establishing its credentials as a financial asset.

However, the winds of change planted seeds of doubts in the minds of even the staunchest nay-sayers. It was recently observed that Tyler Cowen, reputable Bloomberg economist, took a different stance on Bitcoin after being unconvinced for the most part of the Bitcoin era.

Cowen indicated doubts regarding Bitcoin for the first time in December 2013. He said that the price of Bitcoin and other cryptocurrencies would inevitably take each other down because he believed that the supply-side of virtual assets did not work in cohesion with the value of Bitcoin. He suggested that until there was an “equilibrium” placed between marketing competitors, the value of Bitcoin would fall a lot.

The skepticism continued as in March 2015, he had stated that Bitcoin was not going to be a “big deal” in the future. He believed that there was a high volume of fraud and default in the Bitcoin network, which limited the chances of Bitcoin’s competing claim in the mainstream market.

The first sign of a reversal in opinion was witnessed in November 2017, when Cowen indicated that Bitcoin was emerging as a competitor to gold. He said that his views on Bitcoin being a “bubble” had changed over time as gold had lost strength as a hedge. At that time, because inflation was low and India and China had dominated the gold market, Bowen indicated that Bitcoin provided the case as a strong competitor.

Now, on June 28th, 2019, Cowen seemed to have to completely changed his stance on Bitcoin as he claimed that Bitcoin had a future and was here to stay which included reasons such as the US/China trade war, which drove the BTC demand. He also suggested that Facebook’s entry into the cryptocurrency medium would only further promote the allure of virtual assets and Bitcoin would be the top gainer in that scenario.

Change of heart

In similar fashion, Bitcoin also received criticism from other important personalities. Agustin Carstens, BIS General Manager, had earlier labeled Bitcoin a “Ponzi scheme” and also warned Central Banks against the issuance of Central Bank digital currencies. However, in a recent interview, Carstens expressed his change of opinion and stated that Bitcoin had a role in the industry as a “financial asset.”

Marc Faber, a prominent Swiss investor, is also another major example who recently invested in Bitcoin. He had earlier indicated that he remained doubtful towards the idea of a virtual asset but his recent investment in Bitcoin indicated that his opinion had also taken a U-turn.