By December 27, 2017, bitcoin was worth more than $15,400. However, Morgan Stanley analyst James Faucette says that the real worth of bitcoins is nothing but zero dollars. Business Insider reported that Faucette had sent a note to Morgan Stanley clients before Christmas saying that the worth of cryptocurrency is zero.
This suggestion is based on the fact that the number of retailers is very few and is shrinking. “If nobody accepts the technology for payment then the value would be zero,” Faucette said in his analysis.
Bitcoins have seen quite a rise in 2017, increasing nearly 2000 percent in value within a year. According to Coindesk, a site that tracks cryptocurrency’s value, it was valued at $1000 on January 1, 2017. By December 2017, the price jumped to over $19,300. This high rise was seen in less than a year. Faucette concluded that bitcoin can’t be considered a true currency like the US Dollar or Euro since a real currency doesn’t have interest rate associated with it. He accepted the fact that there are similarities of bitcoin with gold, but it still does not have the same intrinsic value as gold
Despite its popularity, many have the opinion that bitcoins bubble will eventually pop and its high price will collapse. In September 2017, JP Morgan CEO James Dimon called bitcoin a “fraud” and claimed that he would fire any trader who was found trading it. Later on, in early 2017, one of Bitcoin’s co-founder sold all of his Bitcoins. An associate professor of finance at the Southampton Business School in the UK, Jeremy Eng-Tuck Cheah, said in an interview, “At the moment, my personal assessment of the Bitcoin market is that it is largely driven by irrational exuberance given its recent launch on CBOE [Chicago Board Operations Exchange] that has piqued the interest of many investors not usually attracted to or exposed to investing in cryptocurrencies.”
Cheah agreed with Faucette’s assessment of bitcoins true worth. Cheah said, “I remain unconvinced that Bitcoin as a cryptocurrency has any fundamental value and therefore, its price is largely driven by the supply and demand for the digital currency,” he continued, “As Bitcoin prices do not seem to have any fundamental or underlying value, we are almost certain that investors’ sentiment is underpinning the supply and demand interactions in the Bitcoin markets now.” While Faucette’s conclusion is a bit grim, it is important to remember that Bitcoin is valuable in the sense that it can still be exchanged for more mainstream currency.
