Bitcoin has been on a rollercoaster ride in recent months, with its value skyrocketing and then dropping again. But why is it that many experts believe that bitcoin will fail in the long run? There are several reasons why this digital currency is not likely to succeed in the long term. The first and most obvious reason is that bitcoin is not a reliable currency. Its owners prefer to accumulate rather than spend, and this has caused its value to fluctuate wildly.
This makes it impossible to predict whether it will be worth the same tomorrow as it is today. This volatility makes it difficult for sellers who accept bitcoin to make a profit, as their profits could be wiped out if the value of bitcoin drops suddenly. Another issue with bitcoin is that it is not backed by any government or central bank. This means that it is not subject to the same regulations as fiat money, and its value can be manipulated by those with enough money to do so.
This lack of regulation also makes it difficult for governments to track and recover any money lost through bitcoin transactions, such as in the case of the Colonial Pipeline ransomware attack. Finally, many experts believe that bitcoin will never be able to replace fiat money as an international payment system. This is because fiat money is already becoming fully digital, and any advantages that bitcoin may have over fiat money will be eroded when this happens. It is clear that there are many reasons why bitcoin will fail in the long run.
Its volatile nature makes it difficult for sellers to make a profit, its lack of regulation makes it difficult for governments to track and recover lost funds, and its inability to replace fiat money as an international payment system means that it will never be able to compete with well-established currencies. Despite its high valuations on paper, a collapse of Bitcoin and other cryptocurrencies is unlikely to affect the financial system. But given the decentralized, mobile and global characteristics of cryptocurrencies, any repression usually leads to Bitcoin's activities simply shifting to a different jurisdiction. In conclusion, while some people may have made a lot of money from investing in bitcoin, it is unlikely that this digital currency will ever become a reliable form of payment or store of value in the long run.
