This Is Why The Banks Criticise Cryptocurrencies
It is a well-known fact that traditional finance industries do not always support the cryptocurrency industry. Although there are a number of different reasons, the one that is normally brought to the forefront of people’s attention is that cryptocurrencies lack intrinsic value, which makes them incredibly vulnerable to huge price drops and volatility.
It should be pointed out that this is not just the case with cryptocurrencies, and every single asset, currency, and commodity in the global market do not have intrinsic value, even gold, which is the largest store of value. Wall Street-based hedge fund Fundstrat strategist, Tom Lee said;
“There are potentially millions of times more gold underground than actually has been extracted…If you ask a baby boomer, ‘Can you justify the value of anything that’s a digital business?’ they probably don’t accept that Facebook, Google, Netflix, Amazon, Apple, these are the largest companies in the S&P 500 and they’re primarily digital businesses built almost purely on digital trust.”
Cryptocurrencies have often been described as being little more than a fraudulent bubble; however, those that believe this often fail to remember that the market operates on the basis of supply and demand, which means that those investors are investing in the virtual currencies at the current prices because they see value in them. The price fluctuations come when people are not willing to pay the price, and this is the same principal as the stock market.
However; experts who are involved with cryptocurrencies say that this fear is actually a good thing, as it demonstrates that they are in some form of competition with banks.
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