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Opinion: Here’s how bitcoin can fit with your stocks and bonds

November 20
15:44 2017

Is bitcoin a fraud, a fad, an asset, or the currency of the future?

Detractors explain its meteoric valuation by suggesting the former; proponents, the latter. It is important to understand what bitcoin BTCUSD, +1.96%   is before deciding if its valuation is justified.

In 2009, Satoshi Nakamoto introduced the block chain, a decentralized ledger, that could be used to transfer value without a central intermediary and created bitcoin. It is not debatable that in today’s world of digital transactions a decentralized ledger has many applications, and bitcoin may play a central part in them. Many of these applications are in fact being crowd-sourced through the issuance of cryptocurrencies using ICOs (initial coin offerings).

Investors can only participate in these coin sales by paying in bitcoin (or Ether), so the large inflow of capital into these promising technologies has created a demand for bitcoin, but it is not clear whether this demand is sustainable. Once these investment opportunities go mainstream, funding might come from more traditional fiat money or an improved coin. On the other hand, it may be that new coins issued in the ICOs are redundant and bitcoin will be used instead. As these uses increase, so too will the value of bitcoin.

Continue Reading at Market Watch

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