The Bitcoin Fallacy: Why its Value Could be Flawed and How Traders Still Profit
1. Bitcoin and its Value Is its Value Flawed? Bitcoin was made to be a future currency, but for the most part it currently exists as an asset of pure speculation. Reasons for its speculation or value proposition is discussed below. Secure Exchange + Blockchain : Bitcoin offers additional utility over cash because of the nature of the blockchain. The blockchain creates a decentralised store of value - which is useful for storing wealth outside of traditional financial systems. Use cases: hyper inflationary countries, authoritarian regimes. The blockchain allows for borderless transactions. Whilst anonymised, the blockchain is transparent and provides full visibility of its money supply and transactions. Current Utility Deficiencies : Volatility - it is a speculative asset. Regulatory uncertainty: Classification of Bitcoin as a commodity/property rather than currency (exposing it to tax for transactions in the US, holding bitcoin in Europe can come under capital gains tax). Ban ris...