It’s not uncommon to turn on any cable news network and hear an economist stating that Bitcoin is a fad that will pass. Even CEOs of major financial organizations have expressed their doubts about the longevity of Bitcoin as a currency, but there’s a clue to Bitcoin’s staying power in the most recent quote from JP Morgan’s CEO.
CEO Jamie Dimon says “Forget the blockchain, that’s a technology, but the currency isn’t going to work.” But this is where Dimon doesn’t consider that blockchain applications are more valuable that Bitcoin will ever be.
Is Bitcoin Just A Fad?
Plenty of hedge fund managers and even famous investors like Warren Buffet have expressed their doubt that Bitcoin is anything more than a fad. Some hedge fund managers have even gone so far as to compare Bitcoin’s rise to fame to the Tamagotchi craze that gripped schoolyards in the early 90s.
One reason hedge fund managers and financial investors are shying away from Bitcoin is the considerable amount of risk you take on when hopping into or out of the cryptocurrency. It is more volatile than any stock or futures trading right now, and it is more susceptible to rising and falling on good news in the media more than its value as a coin. That spooks those who want to make stable financial investments since the value can change exponentially overnight.
Why Bitcoin Is Here To Stay
Even the economists that are spelling doom and gloom for Bitcoin as a fad compare it to gold trading, which has been around a lot longer than a few decades. Robert Shiller recently compared the Bitcoin marketplace to the gold bubble but admitted that gold speculation has been a bubble that has been popular for investors over thousands of years.
While Bitcoin may not enjoy that same long life-span as a speculative investment, when compared to some of the other available altcoins that are springing up to take advantage of the cryptocurrency fad, Bitcoin seems like the only reliable choice. Instead of investing in DogeCoin or JesusCoin, it makes sense for investors to flock to the first and most well-known cryptocurrency to dabble in crypto-trading.
Other Worthy Altcoins
While Bitcoin takes much of the mainstream media’s attention when it comes to cryptocurrencies, several other viable currencies are doing things differently compared to Bitcoin. Ethereum is the first network to support smart contracts, which allows developers to contract with one another using ether as a token. Ripple is shaking up the financial industry by providing a much faster means for global transactions between currencies without costly conversions that result in fees and additional time being added to the transaction.