Why cryptocurrencies like Bitcoin are unlikely to disappear anytime soon
Bitcoin has not been cancelled. After the FTX collapse, I had written that I was happy crypto had not been officially regulated in India. However, it’s clear that apart from the taxation-based measures, there won’t be a crypto ban in India, unlike, say, in China.
This is fine. Crypto should not be regulated, and those who dabble in it should be left to their own devices. They should be free to go bankrupt in the manner and time they choose.
At the same time, the FTX scam has not proven to be the death knell of crypto, something one could have hoped for.
This implies that the cryptocurrency market may now be a permanent fixture in the global financial landscape. FTX has demonstrated that it’s possible to attract billions from investors around the globe and squander it, and yet, fail to fundamentally challenge the underlying basis of cryptocurrency. The potential for profit is simply too great and too easy to attain.
The prevailing opinion is that cryptocurrency is a valid asset class, and while there may be some regulatory hurdles, these will eventually be resolved. In time, another surge in value is inevitable, leading to a significant increase in the value of the surviving currencies and tokens. Consequently, a new wave of unsuspecting savers worldwide will jeopardise their finances.
While many of the fringe cryptos have become irrelevant, Bitcoin has survived and has actually performed well enough for people to start getting fooled again. This year, for instance, despite the recent drops, Bitcoin is up 57%. In fact, from its low in November last year to its high in mid-July this year, Bitcoin has doubled.
Any speculative asset that can randomly double and halve is well equipped to be exploited for luring newcomers.
