Cryptocurrency has blown up towards the scene in the past years, especially Bitcoin. The interest has not decreased although there is a significant drop in price since the late 2017 rise.
After the crush from more than $20,000 to $4,000 causing the collapsing of mom-and-pop crypto speculators, cryptocurrency was a secret in public by true believers.
Market participants are again putting their heads together now that Bitcoin continues its latest rally. Bullish voices start to be loud again with the cryptocurrencies currently exchanging to nearly $9,000.
Investors should address utmost caution in bitcoin. In fact, it’s best to take the advice of George Soros. He is one of the greatest figures in currency trading and speculation. As the man who destroyed England’s Bank put it, Bitcoin is gold for fools.
It is a good idea to listen to Soros’s advice as he knows things about currencies. He is pretty unclear when it comes to bitcoin. He then stated in January that Bitcoin was not at all a currency.
As per Soros, a currency will be a steady store of value. Also, a currency that swings 25% in one day cannot pay salaries as salary drops by 25% in one day.
This, according to Soros, is a significant argument that many crypto bulls do not understand. Bitcoin and other cryptocurrencies might be apparently free of the government central banks’ intrigues. But that does not make them a “sound money” substitute to mainstream currencies.
Calling the Explosive Price Behaviour
Soros emphasized the misconceptions that surround the utility of bitcoin as a currency and these misunderstandings helped to twist its price behavior. He said that cryptocurrency is a contradiction and is a classic bubble that always depends on some type of misunderstanding.
This is, for bitcoin speculators, an important point to understand. Its price essentially tangles to assumption and not to its usefulness as a mode of exchange nor as a store of value for normal people and participants of market.
Calling it Correct Twice
From the beginning of the previous year, Soros’s comments sounded visionary. As bubbles naturally do, bitcoin burst’s value falls abruptly before starting to exchange in a more weakened range for months.
Although, it is too early to assume, the behavior of bitcoin post-bubble impressive and accurate pop has already been called by Soros. The cryptocurrency was bombed by the primary collapse. But it has appreciated a significant pillow of support around $4,000 from which its recent bull run has been attached. Bitcoin has significant utility for some actors operating in the middle ground of business and finance, more importantly in increasingly rich and complex countries’ economies with negligence towards the power or to political authoritarian systems and economic governance.
Conclusion
Soros has not expressed his opinion on the latest phase of Bitcoin, so we cannot contact him directly for advice. However, despite all the dynamism of change seen in this latest cryptocurrency boom, the underlying pathology Soros identified in 2018 has not changed significantly.
Bitcoin remains an innovation. Outside of the current place they are already serving, there is still no clear path to mainstream financial use. We don’t see a sharp drop as we did last time, but we don’t see this recent bull race ending with yet another dismay for speculators who are already suffering.
