Price “an imperfect metric” for Bitcoin technology
Bitcoin (BTC) continues to decline and so is the entire market. However, an investment strategist sees it as a paradigm-shifting technology that needs time to appreciate in value.
Bitcoin $6162.92 +1.09% marks another day trading in the red with the rest of the entire market performing even worse. At the time of writing this, all top 100 digital currencies are depreciating according to CoinMarketCap.
Signs of positivity could be found in the fact that Bitcoin dominance is rising despite the decreasing price – it currently stands at 53.6 percent.
According to Chief Strategy Officer at digital asset management company CoinShares Meltem Demirors, Bitcoin is a fairly new technology and that it would take time for people to understand it.
Speaking to CNBC’s Fast Money, she said:
“New technologies that shift the paradigm take a long time to really understand.”
She also noted that there are no appropriate metrics to keep track of the technology’s performance apart from the price:
“The narrative around bitcoin is still really hard to grasp. […] Really the only metric we have for most cryptocurrencies is the price, and price is such an imperfect metric. What does actual utilization look like? That’s really the struggle for crypto right now.
We are starting to see real traction. A lot of it is really dependent on finding those data points, those metrics that are going to drive that growth story.”
Ignore the Price
According to the investment strategist, retail investors ought to ignore the price and consider cryptocurrencies as if they were early-stage internet stocks of companies like Intel, Microsoft, or Amazon.
She also reiterated on the fact that the massive run-up of the cryptocurrency market at the end of 2017 and the beginning of 2018 was caused by hype.
“What we saw in crypto was this massive run-up, where everyone got ‘FOMO,’ or fear of missing out, as we like to say. What it caused is a speculative bubble.”
Jonathan Cheesman, a partner at digital assets management company Distributed Global, also shares the same belief who said that “FOMO was a huge driver and unfortunately, most of the purchases are now underwater.”
Furthermore, the investment strategist believes that the cryptocurrency space is transitioning from a speculative bubble to “building real businesses that serve a real purpose,” as more infrastructure is developed to bridge institutional capital.
Article seen on Bitcoinist, written by Georgi Georgiev
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This article is for informational purposes only and is not financial advice.
