Analyst: Bitcoin Will Be Overtaken By Its Competitors
A leading financial analyst believes that Bitcoin is not the cryptocurrency of the future, and will be overtaken by competitors such as Ripple and ethereum, comparing the current market leader to defunct social media platforms.
Benjamin Quinlan, CEO and Managing Partner of his own consultancy, Quinlan & Associates, and formerly a leading strategist for Deutsche Bank, said that the recent fall in the price of Bitcoin is more than just a temporary blip, and indeed the Hong Kong-based banker believes that the cryptocurrency's valuation will be closer to USD 800 by 2020.
"It's a very emotional topic, where Bitcoin is and where it's going to go," explained Quinlan, talking to Bloomberg.
The rapid fall in the valuation of Bitcoin in recent days has shaken many investors, and raised questions about its durability. "The most recent example, with the price swings in Bitcoin, reinforce the fact that its core purpose as a medium of exchange or a currency is potentially threatened by the fact that its price volatility is just so extreme."
"You add in additional things like transaction times are relatively slow, transaction charges, though it's technically meant to be free, are quite high, and it really thwarts the case that it's meant to be a potential currency."
Quinlan was more positive about the future for newer cryptocurrencies, with what he views as a greater inherent versatility than Bitcoin. "Cryptocurrencies with potential applications, and utilities, such as Ethereum - smart contracts can be built on top of it, decentralized applications - Bitcoin in its current form can't do that. Other cryptocurrencies have anonymity functions and privacy that far surpasses the level of Bitcoin, and some have transaction processing times that far surpass Bitcoin."
Quinlan, who enjoys a successful parallel career in Kong Kong as a stand-up comedian, drew parallels with the early days of social media. "There are various social media players - there are players that started out initially when the various social media platforms came about, but due to the fact that they were not technologically as advanced as competitors that came in, they really fell out of favor with investors."
Many will remember MySpace, and how it was superseded by Facebook, and that may be a change that we are about to see in the world of cryptocurrencies.