Analysts and crypto market participants fear a collapse in cryptocurrencies, especially bitcoin, Business Insider reported. Meanwhile, some world regulators are on the same page. Thus, the ECB said BTC is on a "road to irrelevance." Such pessimistic predictions were provoked by the infamous FTX meltdown.
Business Insider suggests bitcoin was on the verge of a fall even before FTX crashed, and there are two reasons for that. Firstly, the technological shortcomings of the flagship cryptocurrency make it a doubtful means of payment. Secondly, the processing of BTC transactions is rather slow.
The latest surge in BTC is believed to be an "artificially induced last gasp before the road to irrelevance." The token has recently approached $20,000, following the slide to $17,000 in early 2022. As a reminder, the coin’s all-time high was recorded at $69,000.
Experts also point to the controversial reputation of the most popular digital asset. Notably, bitcoin is never used for legal purposes. In addition, the coin is not suitable for investing due to its numerous controversies. What is more, it is difficult for the token to generate cash flows or bring dividends as in the case of transactions in commodities or gold.
Business Insider reckons that the BTC price is artificially fueled by the hype from large investors and lobbyists.
At the end of 2020, some firms actively used bitcoin. In addition, a number of venture capital companies are currently investing heavily in it. Nevertheless, some world regulators warn investors about excessive crypto-related risks. Thus, according to the ECB, bitcoin threatens banks’ reputations.
