TrendsWide
Contact US
  • Home
  • Trending
  • Health
  • Life Style
  • NBA
  • Reviews
No Result
View All Result
TrendsWide
  • Home
  • Trending
  • Health
  • Life Style
  • NBA
  • Reviews
No Result
View All Result
TrendsWide
No Result
View All Result
Home Economie

Debunking David Rosenberg’s belief “the future supply curve of bitcoin is unknown”

by souhaib
December 21, 2020
in Economie
0
74
SHARES
1.2k
VIEWS
Share on FacebookShare on TwitterShare on Reddit
ADVERTISEMENT

Debunking David Rosenberg's belief "the future supply curve of bitcoin is unknown"

You might also like

‘momentum is continuing into 2022’

Astra Space stock closed down 20% on Monday: here’s why

Ripple, Dogecoin, Litecoin price forecast for February 2022

  • Per Rosenberg, BTC is not a valid investment because it is too volatile.
  • Symbiosis CEO, Samuel Junghenn says volatility is not a measure of an investment’s validity.
  • Guggenheim’s Scott Minerd says BTC should be worth approximately £296,150.

After bitcoin (BTC) recently set new highs, David Rosenberg, the chief economist, and strategist at Rosenberg Research & Associates has come out to bash the coin. He went on an interview on December 17, where he said Bitcoin is a massive bubble and that its investors do not understand how its supply works. Rosenberg, who is famous for identifying the housing market bubble 15 years ago, noted that most BTC enthusiasts do not even know who developed it or how it is mined.

Referring to BTC, he said,


Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

“It’s just a classic follow-the-herd, extremely crowded trade. It’s in a massive bubble and everybody seems to believe that we are going to get to that 21 million cap on the supply constraint, but there is really nothing on the protocol to suggest that the supply of bitcoin can’t go up once we hit that limit.”

He went on to distinguish bitcoin from gold saying that the supply curve of gold is certain while the bitcoin’s is unknown.

While Rosenberg’s opinions were assertive, most of his statements were wrong. This is because:

Bitcoin’s fixed supply is indeed 21 million coins while gold supply is uncertain

According to bitcoin.org, a website that was originally registered and owned by Satoshi Nakamoto, bitcoin’s developer,

“Bitcoins are created at a decreasing and predictable rate.”

Basically, bitcoin is a form of money that has all the features of traditional currencies such as “durability, portability, fungibility, scarcity, divisibility, and recognizability”. Unlike physical properties such as gold and silver, it is backed by mathematics, and the network is decentralized.

While mathematically writing Bitcoin’s code, Satoshi Nakamoto set a total supply of 21 million bitcoin. Therefore, only 21 million BTC will ever be created unless there is a protocol change. However, the protocol cannot be amended without the cooperation of all the bitcoin users considering the decentralized nature of the network. It would not even make sense for anyone in the BTC community to make a change that would compromise their money.

On the other hand, the supply of gold remains unknown. A good reason for it is the technological advancements that can cause cheaper gold mining.

Bitcoin is not a “bubble”

Bitcoin’s significant rise in price does not indicate that it is a bubble. Something is a bubble when it is artificially over-valued which can suddenly go down.

In the case of bitcoin, the price depends on its supply and demand. At the moment, especially looking at the institutional buying trend, the demand for bitcoin is increasing very fast, so the price is. Besides, new bitcoins are being created at a decreasing rate which is why the price is climbing up.

In 2017, the crypto market saw a massive boom in BTC price and then a huge crash in 2018. However, during Singapore’s FinTech Festival, Winklevoss twins, the early crypto adopters, explained the current rally is not the same as the previous one. According to Tyler Winklevoss, the co-founder of Gemini cryptocurrency exchange, the 2017 price rally was a FOMO thing. Commenting on the current surge, he said,

“This is the most sophisticated investors, the smartest people in the room, buying the bitcoin quietly…… This cast of characters, these companies, these investors were not in bitcoin back then.”

He added,

“Publicly traded companies like Square and MicroStrategy putting their treasury cash into bitcoin because they’re worried about the oncoming inflation and the scourge of inflation with all the money printing and the stimulus from the Covid pandemic lockdown,”

According to Michael Saylor, the founder and CEO of MicroStrategy (the company currently holds approximately 40,824 bitcoins),

“Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don’t have the option or desire to run their own hedge fund.”

#Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don’t have the option or desire to run their own hedge fund.— Michael Saylor (@michael_saylor) December 17, 2020

Varying outlooks from experts

In the interview, Rosenberg also criticised BTC saying,

“The reason why it’s not really a valid investment thesis is because it’s so bloody volatile.”

However, Samuel Junghenn, the founder and CEO of Symbiosis Capital has a different outlook.

He told Invezz,

“Just because something is volatile, it does not mean that it is not a “valid” investment. There are plenty of people, both professional and private, that make their livings off volatile investments. It comes down to three things; first of all, knowing what your downside risk is; secondly what is the upside in relative terms to the downside; and third what is the probability of the investment paying off.”

Junghenn added that volatility might be beneficial or detrimental, depending on the kind of investment one is making. According to him, volatility is great for traders, seeing as they can’t make profits without volatility.

In a tweet, Michael shared a similar view in terms of taking risks.

Every investor is in danger of losing their wealth due to the great monetary inflation. We all need a Store of Value that is not based on fiat. #Bitcoin is The Solution – an investment grade, safe haven, treasury reserve asset. #BTC is our best https://t.co/Rvf2JvyHMb.— Michael Saylor (@michael_saylor) December 11, 2020

He does not only see Bitcoin as an investment; it is a way of life to him.

Guggenheim Investments’ Scott Minerd, also aired a BTC opinion contrary to Rosenberg’s, saying,

“Our fundamental work shows that bitcoin should be worth about $400,000. It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP.”

Scott Melker, a renowned crypto trader, has encouraged his followers on Twitter to buy bitcoin.

Reminder: billionaires and major corporations are literally on television telling you that they are buying #bitcoin to hold indefinitely.

How could you have possibly been bearish? Because of stupid lines on a useless chart?

I love TA, but common sense is way better.— The Wolf Of All Streets (@scottmelker) December 16, 2020





Source link

Share30Tweet19Share
Previous Post

Italy’s €1 house sales: Auctions2Italy takes different approach

Next Post

Dogecoin Price (DOGE ) Spiked with Elon Musk’s Twitter Antics

souhaib

Recommended For You

‘momentum is continuing into 2022’

by souhaib
February 7, 2022
0

Shares of Chegg Inc (NYSE: CHGG) are up 10% in extended trading on Monday after the student services company said it performed better-than-expected in Q4, despite COVID-19 uncertainty....

Read more

Astra Space stock closed down 20% on Monday: here’s why

by souhaib
February 7, 2022
0

Read more

Ripple, Dogecoin, Litecoin price forecast for February 2022

by souhaib
February 7, 2022
0

The cryptocurrency market is advancing this Monday, and this situation also supports the price of Ripple XRP/USD, Dogecoin DOGE/USD, and Litecoin LTC/USD. Bitcoin is trading above the $44,000...

Read more

Analyst: ‘Apple would be forced into it if Amazon goes after Peloton’

by souhaib
February 7, 2022
0

Read more

Should I buy Uber shares in February 2022?

by souhaib
February 7, 2022
0

Uber Technologies, Inc. (NYSE: UBER) will announce fourth-quarter earnings results this Wednesday, February 09, after the market closes. Uber shares have weakened more than 10% since the beginning...

Read more
Next Post

Dogecoin Price (DOGE ) Spiked with Elon Musk’s Twitter Antics

No Result
View All Result

Recent Posts

  • Bull Market Beckons China Stock Traders as Consumption Revs Up
  • I Offer OnlyFans Stars’ Breast Implants, Lingerie, and Bodily Fluids
  • Powerball jackpot hits $572 million; See winning numbers for Jan. 28
  • Benjamin Netanyahu vows ‘strong and swift’ reaction to string of deadly terror attacks in Israel
  • LeBron James is left furious after referees fail to call foul in Boston Celtics OT loss

Browse by Category

  • Australia
  • Automotive
  • Business
  • Celebrity
  • Cryptocurrency
  • Deals
  • Economie
  • Education
  • Euro
  • Forex
  • Gaming
  • Health
  • Life Style
  • NBA
  • News
  • Politics
  • Reviews
  • Sports
  • Switzerland
  • Trending
  • U.S.
  • Uncategorized

Categories

  • Australia
  • Automotive
  • Business
  • Celebrity
  • Cryptocurrency
  • Deals
  • Economie
  • Education
  • Euro
  • Forex
  • Gaming
  • Health
  • Life Style
  • NBA
  • News
  • Politics
  • Reviews
  • Sports
  • Switzerland
  • Trending
  • U.S.
  • Uncategorized

Pages

  • Contact US
  • Newsletter
  • Privacy Policy
  • Terms & Conditions

© 2021 - TrendsWide

No Result
View All Result
  • Home
  • Contact US
  • Privacy Policy
  • Trending
  • U.S.
  • Economie
  • Deals
  • Reviews
  • Cryptocurrency
  • Health
  • Life Style
  • NBA

© 2021 - TrendsWide