Bitcoin is still not a currency

At its lowest point, Bitcoin fell 18% in today’s trading. Other crypto currencies mimicked the action.

Top tip: cryptos are correlated.

So, a Salvadoran who accepted Bitcoin as legal tender yesterday just saw the value of that ‘currency’ decline between 10-18% in a single day.

That’s quite a kick in the gut for an impoverished nation, Bitcoin isn’t exactly an example of stability.

If someone wants to make a case, that a new owner of Bitcoin tomorrow may then stand a chance to make ‘that 18% back’…….that’s hardly something I’d call a currency.

I’ll keep referring to cryptos as a speculative instrument and not a currency.

September 8, 2021
by Rob Zdravevski

2 Responses to Bitcoin is still not a currency

  1. Leigh says:

    With the arrival of the motor vehicle after a long time of horse & buggy as the premier mode of transport, the “automobile” was perhaps a little more erratic, uncertain and did not have all the same attributes as the traditional horse & buggy. It did not make it any less of a mode of transportation. Maybe just a more speculative one, with enormous potential. Bitcoin certainly does not have all the same attributes as traditional fiat currency, and is perhaps a little more erratic and uncertain, but arguably, Bitcoin is no less a form of currency than the motor vehicle is a mode of transport. Perhaps our comprehension of “What is currency?” is about to change much in the same way as the world’s understanding of transportation changed irrevocably in the late 19th century.
    Having said all that, my own perception is that it represents a store of value (and, yes, a speculative investment) more than it represents a “currency”, but one definition should not necessarily preclude the other.

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