http://www.forexconspiracyreport.com/are-the-experts-confused-about-bitcoin/
Are the Experts Confused about Bitcoin?
We recently wrote about cryptocurrency users flocking to bitcoin and then about how bitcoin took a tumble.
And why else are people flocking to bitcoin? The Chinese stock market is no longer on an upward tear and many who made money speculating in the Shanghai and Shenzhen stock markets are looking to make a killing in bitcoin. Unfortunately, what goes up can come down. In that sense people may be smart to be getting out of more risky and volatile digital currencies but bitcoin itself is volatile.
The problem with bitcoin is that all of the signals for trading are technical. There is no set of fundamentals for bitcoin. In regard to pricing even the experts are confused about bitcoin. Bloomberg writes about bitcoin’s valuation and how currency analysts are confused.
Bitcoin is gold for millennials. Or maybe it’s that generation’s fine wine and collectible art. Or just a bubble waiting to burst.
For foreign-exchange analysts trying to use traditional methods to value the so-called cryptocurrency and its digital cousins, it may be all of the above — but it’s not quite a currency.
“It is difficult to use standard FX valuation frameworks that are based on the fundamental drivers of the currency, like relative productivity, or terms of trade of the country, because there are no such concepts,” said Juan Prada, a New York-based currency strategist at Barclays Capital Inc.
Is bitcoin a currency or a commodity?
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5. The Chinese stock market is no
longer on an upward tear and
many who made money
speculating in the Shanghai and
Shenzhen stock markets are
looking to make a killing in
bitcoin.
14. For foreign-exchange analysts
trying to use traditional methods
to value the so-called
cryptocurrency and its digital
cousins, it may be all of the
above — but it’s not quite a
currency.
15. “It is difficult to use standard FX
valuation frameworks that are
based on the fundamental
drivers of the currency
16. like relative productivity, or
terms of trade of the country,
because there are no such
concepts,” said Juan Prada, a
New York-based currency
strategist at Barclays Capital Inc.
18. “Both gold and bitcoin are
different from usual currencies
in the sense that there is not a
single economic entity that uses
it as a medium of exchange and
unit of account,” Prada said.
19. That aligns with the view of the
U.S. Commodity Futures Trading
Commission, which in September
2015 said that bitcoin and other
virtual currencies were officially
considered commodities.
20. By saying so, the CFTC was able
to assert its authority to provide
oversight of the trading of
cryptocurrency futures and
options in the future.
21. Because there is no fundamental
basis by which to value bitcoins
they are like tulip bulbs in
Holland centuries ago when a
single bulb was worth what
would be thousands of dollars
today.
28. The rationale behind buying and
selling bitcoins is to make money
or often to hide money.
29. The value of the digital currency
is driven by the number of
people who believe that they will
be successful in making or hiding
money.
30. If and when attainment of those
goals is seen as an illusion the
bitcoin market will come
crashing back to some level
supported by its use in
commercial transactions.
