Mainstream Media Publication Asks Crypto Community to Reconsider Bitcoin
Bitcoin has been in the market for the last 10 years growing at incredible rates. Since that moment, the crypto space experienced different situations, including hacks, bear markets and bull runs. Back in 2017, the cryptocurrency reached $20,000 dollars and some weeks later it went down to $6,400 dollars. And although the future remains not clear, experts are predicting Bitcoin to be traded above $50,000 dollars.
Chris Tomlinson wrote an article explaining the whole Bitcoin phenomenon and why it could be positive for the community to reconsider the most important virtual currency.
According to Tomlinson, if Bitcoin reaches $50,000 it will do so because computer-driven trades would have manipulated the markets and because money launderers keep participating in the market.
At the moment, Bitcoin is not regulated all over the world. There are some countries that have some specific rules regarding virtual currencies, but the majority of the nations do not have clear rules related to cryptocurrencies.
In the article, Tomlinson explains how blockchain technology works and which is the effect that it has on the network. And indeed, Bitcoin works because there is a decentralized ledger that does not require a central authority to operate. Tomlinson believes that this allows speculators, libertarians and criminals to easily operate.
At the end of the last year, he wrote about Bitcoin:
“Strings of computer code will never become a true currency capable of holding value over time. And just as gravity holds us to the Earth, economics will bring bitcoin’s perceived value crashing down.”
Bitcoin started to fall after having reached its all-time high in December. At least until now, Bitcoin hasn’t reach previous price levels. Since January, Bitcoin has never been able to all under $5,800, usually staying above $6,200 dollars. Yes, the price has fallen, however, not as much as Tomlinson would have expected.
According to the author, currencies require authority to have value. In the past, each banknote was backed by gold, however, times changed and the gold standard ended. Nowadays, central banks and governments work in order to preserve the value of the currency that circulates in the economy. But clearly, there are some countries in which this does not work. As per the International Monetary Fund (IMF), Venezuela’s inflation is going to be 1,000,000 per cent in 2018.
Tomlinson says that in the cryptocurrency market there is no central authority to control the supply, limit price or regulate the market. He states that traders have built ‘sophisticated high-speed trading programs’ that are used to ‘pump & dump’ virtual currencies and profit from that.
Tomlinson says that these trading activities are illegal on most exchanges and markets. And indeed, that’s certainly the truth. Nonetheless, Bitcoin is not regulated and could be subject to manipulation. As reported in the past, Tether has been accused of manipulating Bitcoin’s price during bear markets.
During this year, the U.S. Securities and Exchange Commission (SEC) has several times blocked attempts to launch bitcoin and crypto exchange-traded funds (ETFs). This is indeed, something that the market has taken very seriously. However, it will be impossible for the space to have a Bitcoin ETF if there are no improvements in terms of market quality improvement.
In the near future, several companies will be launching institutional-grade platforms specifically designed for institutions and wealthy investors. These improvements in the market would allow for the cryptocurrency space to grow.
It is important to mark that since Bitcoin appeared in the market, there have been several scams and fraudulent campaigns. The Texas State Securities Board, for example, took action against these fraudsters and was able to shut down 11 scam sites.
The board wrote on the matter.
“It is important to note that the State Securities Board is not regulating the cryptocurrencies themselves, only the offerings that claim to use virtual currencies in an investment program. […] Shortuly after the securities commissioner entered an emergency desist order against BitConnect, the value of the company’s own cryptocurrency, called BitConnect Coin, feel from $2.6 billion to nearly zero.”
With this situation, investors lost billions of dollars that were invested in a Ponzi scheme. Tomlinson explains that cryptocurrencies are a great opportunity for criminals to buy digital currencies in one country and sell it in another.
Of course, Bitcoin and cryptocurrencies clearly need to be regulated, but not stop their growth, but instead, to allow them to prosper in a clear legal framework. In this way, it would be possible to take care of investors and punish those parties with malicious intentions.
He ends the article by recommending investors to take seriously the claims that bitcoin and other virtual currencies will skyrocket soon. At the moment, we will have to wait and see what will happen in the next months and years in the space.