Author Topic: Could there be a $50,000 bitcoin?  (Read 1661 times)

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Could there be a $50,000 bitcoin?
« on: February 20, 2014, 08:25:39 AM »
In the last year, and with increasing intensity following the early December price spike that briefly put Bitcoin above $1,200, critics have sounded the alarm that the price is a bubble. Some, like Felix Salmon, have recognized the value of the cryptocurrency, but argued that it is simply overvalued, much like pre-2008 real estate.

Others haven’t stopped there, claiming that bitcoin is all bubble, at the center of which is little or no intrinsic value — something closer to a Dutch tulip mania than a real estate bubble. Those making the latter case have included Nobel Laureate Robert Shiller and former Federal Reserve Chairman Alan Greenspan.

It seems reasonable enough to be skeptical of a digital currency unbacked by any state or real-world goods. But bitcoin optimists argue that what “backs” bitcoin is the functionality of its frictionless, low-cost, decentralized payments system. As Circle CEO Jeremy Allaire put it at fact-finding hearings held by the New York Department of Financial Services in January, “The growth in the value of bitcoin is a put option on its adoption as a payments platform.”

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