One of the leading financial media outlets just called Bitcoin a grand pyramid scheme. It doesn’t come as a surprise as it’s common among mainstream media outlets to sensationalize news to gain more readership. Bitcoin is an ideal topic to do just that.
The increasing Bitcoin price in the recent days has pushed the popular cryptocurrency into the limelight. As the cryptocurrency’s price crosses $1000, Financial Times has assigned a new value — $0. The author, in a conflicting, self-contradictory piece compares the trading volume of Bitcoin to that of other traditional fiat currencies and concludes the cryptocurrency’s trading volume to be zero. However, it seems like the article conveniently forgot the cryptocurrency trading platforms and numerous BTC/Fiat currency pairs in action on a daily basis. Given the decentralized nature of Bitcoin, the source of information used to draw a conclusion is irrelevant.
The author also questions the credibility of Bitcoin’s total market capitalization stating the “absence” of any prior practice. But in the very next line, referring to CIA’s practice, the article compares Bitcoin’s total market capitalization with that of Uzbekistani soms. For those who are confused, Uzbekistani soms is a legal tender and a valid medium of value exchange. One can question the rationale behind the view expressed in the article which assumes and twists facts as the author deems fit.
Bitcoin is known for its similarities with gold — the purest form of money until it came along. Also, in the current situation, gold continue to be a widely traded precious commodity. According to the Financial Times article, Bitcoin can’t be considered as money and a mode of investment. Maybe someone should tell that to people who are hedging their local currency against the dollar or hoarding dollar under the fear of local currency losing its value.
The proverbial last nail in the coffin comes in the form of an argument about trading and currency. It is a well-known fact that the forex value of the currency is directly related to multiple factors in which trading plays an important role. Similar to Bitcoin trading, which is the driving factor behind the rise and fall of its price, forex trading also has a considerable effect on the global economy. Also, it is worth noting that the global economic situation, where fiat plays a major role is one of the driving forces behind investment in Bitcoin. Is it any different from speculative forex trading?
Regarding the pyramid scam, maybe the author is in a better position to offer some clarification, for there is no indication whatsoever that the money received from fresh investors is used to pay off others.
The article on Financial Times has managed to gain the cryptocurrency community’s attention. If getting plenty of page views was the mission, then it has definitely succeeded in it.
Ref: Financial Times | Investopedia | Image: club-bit