Bitcoin has seen a massive boost in its value over the past week, with the digital token rising above $13,000 for the first time since last year.
With this recent upsurge of the cryptocurrency, many market watchers are back with their usual song that Bitcoin is the currency of the future. And with Paypal announcing that it will start offering transactions in crypto, the expectations for Bitcoin’s dominance is even higher.
However, despite all the positive activities around the top crypto coin, some shreds of evidence show it still has a long way to go before reaching wide acceptance that can topple fiat currency.
Paypal is a major player in the fiat currency sector offering digital currency payment solutions to billions of people worldwide.
Fidelity Investments, renowned on Wall Street, has also acquired crypto investment products – MicroStrategy Inc and Square Inc. They also revealed they recently bought Bitcoin.
Even with all the hype, Bitcoin and other digital assets are still very far from replacing fiat currencies.
In most cases, the cryptocurrency’s purchasing power is still very rudimentary and flimsy. There hasn’t been a wide acceptance of Bitcoin yet, despite the positive trends around it.
Digital currencies becoming digital gold
Some critics opined that instead of trying to replace fiat currencies, digital tokens are metamorphosing into another asset class similar to gold. There is also proof that financial firms are looking to invest in the cryptocurrency market as institutional.
Chief strategy officer at CoinShares, Meltem Deminors, has added his voice to the current debate about Bitcoin and institutional acceptance. He said the influx of institutional investors in the crypto market is good for its promotion, even though most traditional investors will not see it as very important. For him, that is the story of Bitcoin and its digital brothers so far.
For many observers, the present upsurge of Bitcoin is similar to its astonishing rise a few years back, when it hit the $20,000 resistant level before crashing back again within weeks.
But this time, while some are hoping for the coin to reach similar levels in the coming weeks, few others are a bit skeptical and are more reserved in their investment choices.
Predictions on wider acceptance have not materialized
Top proponents of Bitcoin and cryptocurrency have predicted wider acceptance of the cryptocurrency, but that prediction has not materialized yet. One of the reasons for this is the volatile nature of crypto prices as well as frequent hacks and scams relating to crypto coins.
So, before it can receive greater acceptance, these issues have to be addressed. Apart from its use as a speculative currency, the other major issue is the ability to use it and its volatility. But Meltem still pointed out that tremendous progress has been made to improve its point of sale viability.