Bitcoin is just like regular currency such as the U.S. dollar and the euro. That’s what the Federal Reserve Bank of St. Louis, Missouri, posited in a blog post titled, “Three Ways Bitcoin is Like Regular Currency.”
“No matter how you view it, bitcoin units have no intrinsic value,” according to the blog post. But then again, the “U.S. dollar, the euro, and the Swiss franc, have no intrinsic value either.”
“Digital currencies exist as data. The cash in your wallet exists as a blend of 75 percent cotton and 25 percent linen. Neither is inherently valuable.”
That’s a valid point. A U.S. dollar is merely a piece of paper. It has value because we as a society agree that it’s worth something. But at its core, it’s just paper.
The Federal Reserve Bank of St. Louis also said bitcoin is just like regular currency because there’s a limited supply.
“Its creation is scheduled so that the number of [bitcoin] units can ultimately converge to a cap of 21 million,” the St. Louis Fed wrote. “To maintain its value, [fiat] money must be in limited supply. The Fed, as our nation’s central bank, carefully calibrates the supply of dollars to promote stable prices and maximum employment.”
In its note, the Federal Reserve Bank of St. Louis does not endorse cryptocurrencies, but it doesn’t dismiss them entirely, either. Bitcoin has come under heavy fire amid its erratic price fluctuations and increasing number of high-profile hacks on cryptocurrency exchanges.
Billionaire Warren Buffett, an avowed bitcoin skeptic, dismissed buying cryptocurrencies as speculative gambling, as the Inquisitr has reported.
Similarly, John Williams — the incoming president of the Federal Reserve Bank of New York — said bitcoin and other cryptocurrencies will never replace the U.S. dollar because they’re not currency.
“Cryptocurrency doesn’t pass the basic test of what a currency should be,” John Williams said. The new boss of the New York Fed also pointed out that cryptocurrencies are often viewed as go-to vehicles for money-laundering and tax evasion.
“The setup or institutional arrangement around bitcoin and other cryptocurrencies [is problematic],” Williams said. “First of all, they have problems with fraud, problems with money-laundering, terror financing. There’s a lot of problems there.”
‘Greatest Scam In History’
That’s a sentiment echoed by Bill Harris, the founding CEO of PayPal and former CEO of Intuit.
Harris trashed bitcoin as the “greatest scam in history” and a “colossal pump-and-dump scheme,” as the Inquisitr has reported.
Harris said bitcoin buyers are “losers” who are getting caught up in “the spiral of greed” and are deliberately ignoring the truth, which is that “a bitcoin has no value at all.”
Some Billionaires Are Bitcoin Evangelists
The deep crypto-skepticism of some financial experts is not shared by bitcoin bulls like Twitter billionaire Jack Dorsey, bitcoin billionaires the Winklevoss twins, and tech billionaire Tim Draper.
Jack Dorsey predicts that bitcoin and cryptocurrencies will ultimately displace all other currencies. Similarly, Tim Draper says bitcoin is a revolution that’s bigger than the Internet.
“This is bigger than the internet,” Draper gushed. “It’s bigger than the Iron Age, the Renaissance. It’s bigger than the Industrial Revolution. This affects the entire world and it’s going to be affected in a faster and more prevalent way than you ever imagined.”
In fact, Tim Draper is so bullish that he has set a $250,000 bitcoin price target for 2022, as the Inquisitr has reported. Does that sound lofty? Definitely. Unreasonable? Time will tell.