The chief economist of the world’s largest investment companies in the nines smashed cryptocurrency in the news column of the investment Fund ETF.com.
Joe Davis, chief economist and Director of development Vanguard Investment Strategy Group, highly appreciated the prospects of the technology of the blockchain. At the same time, he compared the growing popularity of cryptocurrency with the Tulip mania that arose in the Netherlands in the 17th century and has since been considered a classic example of a stock bubble.
Davis, whose firm manages the amount of 5.1 trillion dollars, expressed thus:
What can be said about bitcoin as a currency? There’s a good chance that its price will be zero.
Davis then made the trite comparison between a cryptocurrency and the craze of the inhabitants of Holland tulips in the 17th century.
Cryptocurrencies, unlike tulips, it is impossible to put in a vase to admire them.
According to Davis, we can argue whether crypto-currencies are really currency. Digital currency can be considered as the unit of account and medium of exchange but not store of value.
Even if cryptocurrency will take its place in the market, their prospects seem dubious.
Cryptocurrencies do not generate income or dividends, their price is based on speculation, their value is not tied to the value of the technology of the blockchain, and investors in traditional markets are more interesting. He gave an example:
Bitcoin is similar to investment in a blockchain like site Pets.com similar to investments in Internet technology.
When the rate of Bitcoin has fallen in the past year, the Nasdaq also compared with BTC Tulip mania.
The fascination with the Tulip mania is exaggerated. Researcher Anne Goldgar wrote in his book that “speculation in tulips was attended by so many people, and the economic impact was quite insignificant.”
Warren Buffett also spoke strongly against Bitcoin earlier this month, calling it “rat poison”. In response to the publication Cointelegraph wrote an article about what wall street will fall behind, if you do not start to invest in promising technologies such as the blockchain.
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