Despite its price volatility, Bitcoin probably will make more millionaires. Panos Mourdoukoutas, chair of the department of economics at LIU Post in New York City, whose works are published by Forbes and The New York Times, thinks Bitcoin probably will turn more individuals into millionaires before its price dives again.
Bitcoin recently reached an all-time high of ₦1.09 Mln+ ($3,000+) this June following a huge correction to ₦976K ($2,682) from ₦1.07 Mln ($2,957) in the time of two days. That is after tech billionaire Mark Cuban reportedly called Bitcoin's recent price surge a bubble.
However, this really is false because the cryptocurrency is showing an uptrend, centered on its recent price of ₦1.03 Mln ($2,831) and its continuing upward trend.
Mourdoukoutas shared a somewhat similar viewpoint to Cuban's. Both had similar claims that Bitcoin's price would drop after an amazing surge, however, he stopped in short supply of calling Bitcoin a bubble.
Making more millionaires before it crashes again
Mourdoukoutas mentioned that the digital currency made many "overnight millionaires" - folks who invested into BTC when it was worth only a part of its current rate.
He also mentioned that Bitcoin will reach new highs, making more millionaires in the length of the action, before "returning right down to earth."
Mourdoukoutas added that one of many reasons for the increased investment in the cryptocurrency could be the "ultra-low” rate of interest environment, makings the trade of Bitcoin an enticing proposition.
Additionally, there's an increasing mistrust in the currencies of several nations, following government policies which have pushed more investors to the cryptocurrency.
Price restricted by policies and supply
Mourdoukoutas stated that one of these simple policies could be the act by federal governments to supply new treasury bonds at record low rates to cover the old financial obligations with brand-new ones.
As an example, Japan sells treasuries that yield practically nothing for their state, however, the nation's debts total approximately 250 percent of the country's GDP. The teacher mentioned that China's treasury yields "something," however, nobody knows the precise volume of the "informal financial obligation ".
The fact there's an amazing volume of financial obligations associated with the Chinese Yuan and the Japanese Yen limits the confidence of investors. Given that there surely is Bitcoin, a cryptocurrency that's increased its worth by 125 percent in 2016, investors in Asia have used the chance to invest more to the digital currency.
The economics professor also highlighted another government policy that might decrease rely upon a country's nationwide currency. This relocation is when governments wish to eradicate the old currency notes, as held true in India and Venezuela. Such incidents, in accordance with Mourdoukoutas, is certainly one of reasons why Bitcoin price has risen.
Still better hedge fund than traditional ones
Mourdoukoutas further commented there are advantages which can make Bitcoin a better hedge than traditional ones, such as for instance gold. He added that the millennial generation is one of many greatest supporters of the cryptocurrency while they understand BTC superior to the "baby-boomer generation.”
"Unlike gold, for example, Bitcoin is just a hassle-free medium of payment across the globe.”The economics professor expounded that Bitcoin's supply is anticipated to be on a 21 mln. In comparison to gold, there's no deficiency of the mineral given that once the rate of gold rises, it supplies more incentive for gold miners to mine for gold.
Finally, Mourdoukoutas specified that the financier buzz around Bitcoin continuously helps the cryptocurrency to go upwards, as an increasing amount of financiers are becoming acquainted with the digital currency, and can utilize ETFs (exchange-traded funds) to "conveniently take part in the market."