Real Price Of Bitcoin Could Be $0.00 According To Morgan Stanley
Bitcoin could be worth absolutely nothing according to analysts working for banking giant Morgan Stanley. If nobody considers the digital currency as a rival to the US dollar or other fiat currencies then, they warned, then it's virtually worthless.
"If nobody accepts the technology for payment, then the value would be 0," analyst James Faucette and his team wrote in a note to clients adding that the cryptocurrency is tiny compared to other more traditional financial instruments. "Bitcoin average daily trading volume of $3 billion vs $5.4 trillion in the FX market, estimated $300 million in daily purchase volume vs. $17 billion for Visa."
Coinmarketcap data says Faucette's numbers are not correct as it reveals that as an average daily volume of bitcoin is $11.5 billion while the whole cryptocurrency market's daily volume is almost $27 billion. But incorrect data aside, Faucette and his team do have a point. If no one wants to accept cryptocurrencies as a mode of exchange, they might as well be virtual funny money.
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That being said, the same concept applies to all modes of payment be it fiat currency or even gold. They have value because people give them value, but unlike gold, Bitcoin doesn't have any intrinsic use nor is it a tangible substance.
But even if merchants start refusing the digital currency as a mode of payment due to its inherent volatility, it can still be exchanged to fiat currency. Focus would then shift from the currency being used as mode of payment to it being used as a means to safeguard wealth from inflation and economic downturns.
That being said, Bitcoin itself recently took a downturn after investors dumped the currency after it peaked at $20,000. Prices fell by as much as 25 percent causing a minor panic with cryptocurrency enthusiast and billionaire Michael Novogratz updating his prediction now saying that the digital currency could drop to $8,000 by year-end.
However one of the cryptocurrency's biggest supporters, John McAfee of McAfee antivirus, says there is no reason for panic despite the correction in the cryptocurrency market. According to him, the crash was mainly due to people cashing out their coins to do some Christmas shopping adding that once the holidays are over, the currency will once again increase in value.
