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The price of bitcoin has broken above $12,000 gaining over $2,000 of value in one week, bringing a possible end to a shaky time for cryptocurrency investors. Jonathan Davies Wealth Management expressed an opinion on this story.
Sputnik: The price of bitcoin has broken above $12,000 (£9,870) to take its week-on-week gains above $2,000 and bring an end to a shaky time for cryptocurrency investors. How accurate are these predictions? Are we on the verge of seeing cryptos bounce to extraordinary heights?
Jonathan: Although I am an investor I haven’t invested in Bitcoin. I’m not currently an investor in Bitcoin largely because I need to see what I call fundamentals in an asset – all I see with Bitcoin is a load of algorithms and zeros and ones and the small number of folk who have made literally billions, while a large number of folk are scrambling around trying to make some money and more generally have lost a lot of money.
That being said there’s no question that when you look at the charts of Bitcoin, it is in a bull market as we speak, thus simply on a technical basis Bitcoin is bullish and will remain bullish for as long as it remains bullish. No one’s using it for trading. I mean for buying and selling stuff, products or services, it’s a store of value purely and some people are doing fantastically well but the bulk I would suggest are doing really badly.
Sputnik: After it was announced that the launch of Facebook’s crypto ‘Libra’ was being pushed back to 2021 has Facebook left its launch of the Libra too late?
Jonathan: No. When you’re talking about Facebook you’re talking about a company that has access to 2 billion users. That clearly is something like 30% of the global population and I think I’m right in saying that there isn’t another media organization on the planet which has that reach. If as we understand that Facebook would simply stop any advertising for any other cryptocurrency, you only need a tiny fraction of that 2 billion folk to start buying their cryptocurrency and indeed, it could, therefore, do fantastically well. No, they haven’t left it too late on the contrary and indeed when you think of cryptocurrencies, generally, although they’ve known been around for slightly more than a decade let me remind you that a similar technological move the internet had been around for 10/15 years and still only a few million people were using was using the internet. We’re still only in the first maybe second of nine innings.
Sputnik: What factors and problems does Bitcoin and other cryptos need to address to capitalize on this bounce? Will there ever be a time when Bitcoin becomes accessible to the general public?
Jonathan: Some of your listeners will remember prior to the 2000s it was actually quite difficult to get on to the internet and many of the big names that were around then have just simply gone by the wayside. Newer companies came along and made it much more user-friendly that one of the main reasons why the internet then became so widely used because it was usable by non-technologists. There’s no question that once the cryptocurrency community creates some kind of a standard access to crypto and makes it easy to buy and sell as opposed to it’s still even know it’s been around for over a decade, it’s still even now quite complex to buy and sell, when they make that easy then it will become more popular. What else do they have to do? Well, for goodness sake, they have to improve their security. There are something like over 1000 cryptocurrencies and I am no expert in this field but I happen to believe that just like there were hundreds of internet companies and now with the internet which basically is controlled by half a dozen – I think the similar thing is going to happen in crypto. You’ll have Bitcoin, maybe the likes of Facebook and a couple of others. So I think people should be very wary about holding what potentially might be the hundreds of ‘also-rans’ into the longer term and stick with what seems to be the currencies that are going to be the ones that are going to be widely held in the longer term.
The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.