101 Interactions, 4 Today
Bitcoin’s detractors significantly outnumber its supporters in traditional finance. Many industry executives’ reactions to El Salvador’s adoption of cryptocurrencies as legal tender have only reaffirmed this.
While many have lauded the move as one for the ages, many others have not shied away from pointing out its alleged shortcomings.
The CEO of Verde Capital Advisors Leo Kelly is one of them. According to the exec, jurisdictions around the world declaring Bitcoin as a currency is quite a stretch, with many put off by its “absurd volatility.” While the said criticism is an old one and has been objected to repeatedly, the timing of the statement was interesting. Especially since it came after BTC dropped below $45,000 after the El Salvador announcement.
Now, while Bitcoin has recovered since, the crypto-asset is yet to recover much of its lost market cap.
Kelly didn’t stop there, however, with the exec also claiming that Bitcoin’s legitimacy has been debunked. It can neither be a good store of value nor replace gold, he added.
Bitcoin’s “absurd” volatility, real or not, has been a huge deterrent for many would-be mainstream investors. It should be noted, however, that Bitcoin’s volatility has started to come down as the asset’s supply has increased and more participants have entered the market.
As can be seen from the chart below, the BTC/USD 60-day volatility hasn’t crossed the 10% threshold since 2014, despite the price noting sharp movements over this time.
Kelly isn’t alone though. Echoing his views, another billionaire investor and Omega Advisors CEO Lee Cooperman criticized Bitcoin for “not making a great deal of sense.” While the old-timer admitted that he had insufficient knowledge about the cryptocurrency, he nevertheless advised the U.S government to stay mindful of how it is interacted with.
According to Cooperman, the country should absolutely not follow El Salvador’s example as “Bitcoin can’t act as a substitute for the US Dollar.”
What’s more, the exec also advised people to invest in gold instead of Bitcoin as the precious metal would be “a better place to store value.”
While traditional investors promoting gold is not a new tale, it should be emphasised that its price relative to the US dollar has remained rather stable over the last decade. Bitcoin, on the other hand, has been the greatest performing asset over the last ten years, with a ROI of more than 8,900,000 percent.
Furthermore, BTC’s valuation has increased by 60% this year, while Gold’s has decreased by more than 5%.
What will it take to change these executives’ views on gold and Bitcoin? It’s difficult to say. The basic reason for this could be that old habits die hard.