Altcoins Are Responsible For Bringing Down the Value of Bitcoin (BTC) Claims Federal Reserve Bank of St. Louis – BTC News Today – BTC/USD Price Today

Crypto Destroyer

Recently, the Federal Reserve
Bank of St. Louis published an article about the world’s largest digital
currency. In the article, the bank said that the value of Bitcoin (BTC) has
three potential futures. The three potential futures are zero, infinite
appreciation, indefinite, or somewhere in between. However, the bank believes
the potential future of the digital currency will be somewhere in between.

The Federal Reserve Blames Altcoins for the Downfall of Bitcoin (BTC)

Andrew Spewak and David
Andolfatto – the authors of the article – said that the ever-expanding supply of alternative coins is one of the major
factors why Bitcoin is declining drastically. After all, demand determines
value.

The market has seen the launch of
other digital currencies with properties that are more attractive. If Bitcoin
(BTC) was still the only digital currency, something that happened only for a
short period of time, all the funds channeled to altcoins would probably go into
BTC.

Nevertheless, the argument of
Bitcoin (BTC) maximalist that the digital currency will usurp every enhancement
by other digital currencies has never come to fruition. The blockchain of
Bitcoin even has fewer decentralized apps (Dapps) and Dapp users than other
projects that emerged much later such as
Tron.

Complicating Factors to the Value of Bitcoin (BTC)

The value of Bitcoin (BTC) has
two other complicating factors. On one side, Bitcoin (BTC) is the digital
currency with superior quality. As such, it is the off-ramp and on-ramp for
several other digital currencies. Initially, Initial Coin Offerings were
basically conducted for Bitcoin (BTC). However, Ethereum now carries out the
same function.

Initial Coin Offerings (ICOs)
increased demand for Ethereum (ETH) through 2017 and 2018. The supply of
Ethereum is very high, and it might never stop producing new units.

An aspect of the
article states, “Consider now the bearish
case of Bitcoin (BTC). This outlook is based on the view that the digital currency
has no fundamental value and sooner or later, the market will recognize this
fact. In our opinion, one can accept that Bitcoin trades above its fundamental
value without claiming that its fundamental value is zero. In fact, a lot of
securities trade above what might be considered their fundamental value. Gold,
for instance, trades above its value as measured by its industrial
applications.

As noted earlier, the actual use
of Bitcoin (BTC) is a secure digital store of value and transfer of the same.
The blockchain aspect of digital currency has been taken and dominated by other
blockchain products. Irrespective of the global chaos, demand for
cryptographically secure payment systems is not popping.

However, it is obvious that
people will encounter blockchain technologies through banking applications and other decentralized apps.
Things like this will increase demand for digital currencies that underpin
those blockchains. Digital currencies such as NEO, Tron (TRX), and Ethereum
(ETH) have a long-term technical proposition that Bitcoin (BTC) has been
lagging on for a long time.

Bitcoin (BTC) Price Today – BTC / USD

At the time of writing, Bitcoin
(BTC) is trading at $3,614 after an increase of less than one percent over the
past twenty-four hours. The current
market cap of the digital currency is $63.17 billion and its trading volume
over the past twenty-four hours is $3.08
billion.

Crypto Destroyer

Be the first to comment

Leave a Reply