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  • Writer's pictureIshfaaq Peerally

Why BITCOIN Will Always FAIL

Today, we're going to talk about something that is trending again, $BTC . After a bad 2018, $BTC is recovering this year. Should you buy it now? Before we answer this question, let me tell you about my experience with cryptocurrencies. I first bought $BTC in 2016 when it was around $600 but sold it only after a couple of weeks. Then, I bought again in early 2017 at around $900 and held until the price reached $19 000. I also bought $ETHEREUM at $28 and sold at $750. I've made over 2000% profits on some of these trades, something that I never did on any other trades on any stock. My best performing trade right now are $AAPL shares I bought in May 2016 and which are now 102% up.

The reason why I bought Bitcoin at the time was that I believed in the future of Bitcoin itself as a currency and the blockchain as a technology. And I was expecting a 20% gain per year. There are some days, however, when Bitcoin was moving my 20%. This completely changed my views on Bitcoin.

If Bitcoin is going to be used as a currency, it cannot be volatile. Since it is not backed by any other securities, it doesn't have any intrinsic value and the price will always fluctuate a lot. The $USDOLLAR and other fiat currencies are only used because they are stable. You will rarely see a currency move by more than 5% in a day. That's why, they can be used as a currency.

Now, if you want Bitcoin to be a store of value, something to be bought and held, then you should expect the price to rise and you won't be able to use it as a currency. It just becomes something like a stock or a bond which nobody uses as currencies.

You may tell me that $GOLD was used as both a store of value and a currency in the past. This is true but at the time, food was scarce and only some people could actually own land and own gold, so it was a store of value only for some and it was always used to wage wars, to conquer lands and to mine more gold.

Bitcoin and any other cryptocurrency can either be used as a store of value or a currency but not both. So you should make sure, which one you want it to be. You should be clear about that. For me, it is a store of value. I don't currently own any Bitcoin but I may buy some when the price falls around $3000 again because I believe that if will be trending again at some point in the future and I may make a profit on that. But because of its nature, it will be a very small position.

What do you think? Is Bitcoin a store of value or a currency?

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