The chief economist of the world’s largest investment company flopped the cryptocurrency
Joe Davis, chief economist and development director of Vanguard Investment Strategy Group, highly appreciated the prospects of blocking technology. At the same time, he compared the growth in the popularity of cryptocurrencies with tulipmania, which originated in the Netherlands in the 17th century and has since been considered a classic example of an exchange bubble.
Davis, whose firm manages $5.1 trillion, said:
What can you say about bitcoin as a currency? There is a considerable probability that its price will be zero.
Davis further made a banal comparison between the crypto-currency and the general fascination of the inhabitants of Holland with tulips in the 17th century.
Crypto-currencies, unlike tulips, cannot be put in a vase to admire them.
According to Davis, one can argue whether the Cryptocurrency is really a currency. Digital currencies can be considered a unit of account and a means of exchange, but not a means of saving.
Even if the Cryptocurrencies take their place in the market, their prospects seem questionable.
Cryptocurrencies do not generate income or dividends, their price is formed on the basis of speculation, their value is not related to the value of blocking technology, and for investors traditional markets are more interesting. He gave an example:
Bitcoin is just as similar to the investment in blockbuster as the site Pets.com is similar to the investment in Internet technology.
When Bitcoin’s rate fell last year, the Nasdaq exchange also compared BTC to tulipomania.
The fascination with tulipanomania is exaggerated. The researcher Ann Goldgher wrote in her book that “not many people took part in the tulip speculation, and the economic consequences were rather insignificant.”
Warren Buffett also spoke sharply towards Bitcoin earlier this month, calling him “rat poison.” In response, the Cointelegraph published an article stating that Wall Street would fall behind if it did not start investing in promising technologies like blockbuster.