Bitcoin (BTC) has constantly displayed strange movement in the cryptocurrency market, a price behaviour that gives room for doubt about the surety of the digital currency. A well-known financial expert has taken time to analyse hidden weaknesses of Bitcoin that must be opened to investors.
A global solidarity about Bitcoin investment is ongoing. Crypto enthusiasts around the world are pushing for it global adoption, having a financial world that is entirely dominated by BTC and other digital currencies in view.
Bitcoin (BTC) has seen ups and downs in price since attaining its landmark price of $20,000 in 2017. Expectations have grown among crypto individuals as to when Bitcoin would break its hallmark price resistance and shock the world.
Bitcoin had exhibited features of volatility in a number of times. BTC price has tendency to fire to the top in a matter of hours, as well as dropping below in the same range of time. This highlights a bit about the weakness embedded in Bitcoin that some investors may have not taken to consideration.
At the time of filing this report, Bitcoin (BTC) is trading at $7,602.64, with 4.13% plummet in price in the last 24 hours. All the top digital currencies are faced with the same market condition, as crypto assets such as Ethereum (ETH), Ripple’s XRP, Bitcoin Cash (BCH), Stellar (XML) and Cardano (ADA) have experienced at least 8% drop in price in the last 24 hours.
Finance Expert Pinpoints Bitcoin (BTC)’s Weaknesses Investors Must Watch
James Rickards, an American Lawyer and the author of “Currency Wars”, made a long clarification about the neglected facts related to the weaknesses of Bitcoin in his recent article.
To be sincere, much like this is expected from Rickards due to his keen interest in Gold investment, the top challenger of Bitcoin (BTC) in stock market.
In his sentiment, he pointed to the high volatility of Bitcoin. A notable parabolic movement of 52 percent upsurge in less than 7 weeks, between 26th March and 15th May 2019, where BTC dumped from $3900 to $8,100. What a ridiculous price upsurge!
The major cause of the collapse of Bitcoin (BTC) from relatively $8,300 to less than $7,000 in the interval of two days is another fact Rickards observed. Speculations have it that a Bitcoin Whale sold a huge sum of BTC, which left a negative impact on the path of the digital asset to the top.
Rickards clarified that this indicates a big weakness of Bitcoin and cryptocurrencies at large, since their prices can be significantly controlled by a number of capital investors (Whales), leaving petty suitors vulnerable to their constant market command.
Rickards shared that Bitcoin (BTC) is still liable to experience price crash despite its recent price regain. He said “Although bitcoin prices have picked up, in any case, last Friday’s flash crash highlighted a major weakness in Bitcoin. As Bitcoin proves in the horrific crash of 2017-2018, it may collapse like a house of cards.”
He continued by pointing to the disadvantage of the slow and awkward transaction verification process of Bitcoin on its blockchain, which deters it from being scalable.
“Since the new transaction verification process on the Bitcoin blockchain is slow and awkward, it is still not scalable. Bitcoin has no future as a “currency” because the supply of bitcoin cannot exceed the preset amount.”
Rickards also said Bitcoin infrastructure encourages hacking, bankruptcy and constant crypto theft. Conclusively, he said the above listed points would continue to negatively affect BTC’s steady price surge.
The above illustration reflects the view of James Rickards, a Gold investor with series of publication on the financial market.