Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Some crypto ‘will survive', but bitcoin has no hope: strategist

By Lucy Dean · February 01 2018
Reading:
egg
egg
egg
Bitcoin has no hope, thumbs down
Some crypto ‘will survive', but bitcoin has no hope: strategist

Some crypto ‘will survive', but bitcoin has no hope: strategist

author image
By Lucy Dean · February 01 2018
Reading:
egg
egg
egg
Bitcoin has no hope, thumbs down

Like the first pancake in a batch, bitcoin got the crypto ball rolling, but will probably end up in the bin.  

That’s according to CMC Markets’ Australian chief market strategist, Michael McCarthy. Speaking to Nest Egg, Mr McCarthy explained that the crypto-sphere is experiencing something similar to the dotcom bubble.

That is, it’s uncertain which technologies or cryptocurrencies will survive, so investors are “buying everything”.

However: “It's almost certain that if a cryptocurrency becomes one of the biggest currencies' in the world, it will not be bitcoin.

“One of them [the cryptocurrencies] could do. If it does, it's going to be worth a lot more than it is even at its peak, worth a lot more than it is today.”

Advertisement
Advertisement

Alternatively, should someone discover how to “crack the cryptography” all currencies would be worth nothing.

“We don't know which of those two scenarios is more likely even, so it's a difficult call,” Mr McCarthy said.

“And that's why I say it's very much high risk, potentially high reward, but because of that uncertainty about the future, it's just like the dotcom bubble. Nobody knew, but everybody wanted to get involved.”

Regardless, he says the one thing that is certain is that if a cryptocurrency does take off; “It can’t be bitcoin. We know that much.”

He says bitcoin’s algorithm is now too slow and its payment processing lag is also too slow. That means that the current and future innovations in the crypto-sphere will leave it behind.

He referenced ivyKoin, which hopes to aid in the transparency of transactions of more than $10,000. As Nest Egg reported yesterday, ivyKoin said it will challenge whether the anonymity behind cryptocurrencies and the blockchain is the best thing for businesses and consumers.

The currency’s chief technology officer, Michael Beck said the anonymity of transactions was the biggest hurdle for crypto’s mainstream adoption.

“This issue is limiting businesses to realise the potential of using cryptocurrencies in cost savings, speed and convenience,” Mr Beck continued.

“With ivyKoin, we’re giving business owners and financial institutions that rely on bank-based transactions a level of certainty and trust for moving, storing and transacting with cryptocurrencies.”

Noting this particular currency, Mr McCarthy said: “There's a lot of room for innovation in digital currencies.

“There's a lot of potential in digital currencies that might mean that one day they will replace conventional currencies, but we're a long way from that, and my view would be that none of the existing coins could do that at this stage.”

He argued that the current “explosion” of cryptocurrencies mirrors the way most industries start – a preponderance of offerings followed by a sharp reduction.

According to coin ranking service, CoinMarketCap, there are 1,508 different cryptocurrencies.

Mr McCarthy commented: “In June last year, it was estimated there were just over 900. By September that had grown to 1,000. We're now at more than 1,300, so although we hear a lot about bitcoin, ethereum, and ripple or bitcoin cash, or whatever, there are literally hundreds of them out there.

“So… it’s exploding. And that is the way most existing industries started. I think it was in 1950, there were 62 car manufacturers in the US. Now, there are four.”

“I think we're at the enormous expansions phase, and that suggests there is something here that will last. But the majority of the current won't.”

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Copyright © 2019 MOMENTUM MEDIA