There is only one crypto currency - bitcoin, other cryptocurrencies do not exist
Good afternoon, dear readers of our investment exchange portal. Today our guest is one of our regular contributors to the website, Alexei Romanov, whom you will know more under the pseudonym of Alex. His articles you can find in the sections strategies (Forex binary options), as well as in the section of expert-advisers. The topic of our conversation — cryptocurrencies, in particular – bitcoin. I will say in advance, the opinion of Alexei at the expense of the cryptocurrency is non-trivial, so this interview is definitely worth reading.
Buying bitcoin: build castles in the sky
Hello, Alex. Judging by the policies that you describe on the website you are a supporter of currencies and securities. You are also an outspoken critic of buying bitcoins and other cryptocurrencies. Tell me, you know that for the last 5 months, bitcoin has actually doubled its value? Invested money in may, could earn around 80% in six months!
Hello, Anna, and dear readers. Of course we know. I’ll say even more: in the last week the bitcoin has grown from 650 to 720 dollars. Do not argue, a good tendency, but let’s look at the causes of this dynamics:
- Some analysts blame China in the growth of rate of bitcoin, whose share in all transactions with cryptocurrency — about 90%. Attempt to protect against currency depreciation, the Chinese are buying bitcoin.
I’m sorry, I do not believe these stories. China has already tried to drag last fall to increase the price of the cryptocurrency, citing a pyramid of Mavrodi. Honestly, can you imagine what the volume of transactions on the pyramid Mavrodi would have to pass in order to affect the world quotes of bitcoin? Suppose that the Chinese prefer the bitcoin (because of anonymity). Let’s look at the dynamics of bitcoin in January 2016, when China collapsed stock index.
You see a splash of rate in January? I don’t. I even see a drawdown, which had bounced back by the end of February. So where is the influence of Chinese to the current growth of rate?
And what is your version of the growth of rate?
I didn’t like to express this opinion, but the elections in the United States. Why don’t like — because cryptocurrency rate is defined as unknown, or rather, it defies economic laws, but this time, after all the relatively obvious. A sharp jump was observed also during the summer before the referendum in the UK, then the drawdown. This time will be the same. Another week will be the increase, then in mid-November — a recession. Before major fundamental news buying bitcoins correlated with gold, which is now also winning back the losses after the referendum. That’s just what’s next? Major fundamental events can be foreseen, and therefore there are no prospects for bitcoin.
And effect of halving of income?
Oh, what’s the effect. You analysts said that after halving, the cryptocurrency will rise. The argument cited the increasing costs of mining and rarity. But on the contrary it fell. Why? Yes, the bitcoin is not interesting for the investors! Raised the cost of mining – will move on to other assets. The same will happen now. Elections will be held, the purchase of bitcoins will become not interesting, and the course is slowly crawling down. And no Chinese will help. By the way, note the drawdown of bitcoin and periods of stagnation. Buying bitcoin can bring a loss of 50-70% and it will take 1.5-2 years before there’s a recovery. As for me, gold is better.
And if you consider other cryptocurrencies? They may cost less, but large investments can be interesting.
In what? For example, I don’t know other cryptocurrencies besides bitcoin. Let’s think logically:
- crypto – an electronic currency that is created using the encryption information (say, no questions);
- currency, i.e. money — equivalent of exchange, the equivalent of expressions of the cost.
Beads, ivory, etc. in its time were money (I’m not talking about the issue and availability of money). Now there is fiat money, that is really existing. There are electronic money, but that’s not the bitcoin as electronic money backed by real and controlled financial centers. Cryptocurrency does not have a single emission center, and is an encrypted mechanism. But it can be called cryptocurrency only when it will perform the function of money.
Bitcoins now accepted in many countries as payment for goods and services. There are interesting services that will tell the working principle of the example of Amazon:
- the customer who wants to buy a product on Amazon with bitcoin, adds it to cart of the service;
- service finds interested in buying bitcoins, gets for them real money;
- the customer receives the goods, the buyer – bitcoins on Amazon the real money is sent.
Such services yet have many problems, but the fact that bitcoins are gradually becoming means of payment are already talking about trust. Tell me if you can buy anything with litecoin? So why then they are called cryptocurrency? This interference is an asset, a tool, but not a currency!
By the way, there is a similar question at the governments of different countries. The U.S. does not consider bitcoin a money, equating it to an exchange instrument with the relevant tax obligations. Europe on the contrary is on the path of Japan in March 2016, recognized the bitcoin as fiat currency. Although the views of the EU are ambiguous.
So there is only one cryptocurrency? And how then to call the remaining more than 400 “cryptocurrencies”?
I strongly doubt that there are more than 400 Call them as you wish. Only when you see OneCoin or E-Dinar, recently rustling in the press, don’t be surprised. I have these HYIPs (financial pyramids) evoke a sense of disgust. Fraudulently codified under real crypto mechanisms, only lure the investors money.
And how to distinguish a pyramid from cryptocurrencies?
- If you are promised a steady monthly income – it is HYIP.
- If crypto mechanism has a website promoting it and the common representative – it is a HYIP. Cryptocurrency has no single emission center.
- Read the reviews and monitor the exchange. Product of HYIP is not accepted anywhere except in exchange of its creator.
By the way, let’s see the dynamics of litecoin and make conclusions.
Thanks for the interview, Alex. Our readers have right not to accept this opinion, so we are waiting for the comments below! And see you at new meetings on pages of investment exchange portal !