‘Bitcoin Is Worth Zero’ – Kenya Telecom Strategist Warns African Investors to Be Caution – Bitcoin Featured News – News Couple

‘Bitcoin Is Worth Zero’ – Kenya Telecom Strategist Warns African Investors to Be Caution – Bitcoin Featured News

Kenyan telecom analyst Mwotia Ciugu has told African investors to be wary of investing in Bitcoin, which claims to be zero.

Bitcoin is structurally unable to deliver on its promise

In an opinion piece published by The Elephant, Ciugu insists that Bitcoin (BTC) is structurally unable to deliver on its promise to become an alternative store of value or an inflation hedge. In addition, the strategist also claims that bitcoin has failed as a currency and as an investment.

While he admits that Africa has one of the highest rates of cryptocurrency adoption, Ciugu cautions, however, that the cryptocurrency’s most important issues of volatility and scalability mean that it cannot function as a currency. Ciugu was quoted explaining:

Bitcoin fails as a currency because of two things: volatility and scalability. During the 12 years of its existence, Bitcoin has maintained extremely high levels of volatility, i.e. 60 percent to 100 percent annually.

To further support this point, Ciugu is referring to the US dollar claiming its “annual volatility of 17 [percent]. Regarding the scalability issues of crypto assets, Ciugu is expected to renew popular arguments about Bitcoin’s inefficient use of electricity and how this is leading to its exclusion as a currency for everyday transactions.

Bitcoin is useful for cross-border transfers

Meanwhile, the strategist denies that bitcoin is now widely used in El Salvador, the first country in the world to announce legal tender for bitcoin. According to Ciugu, the US dollar is still the dominant currency in El Salvador. Despite these arguments being put forward, Ciugu surprisingly agrees that sending remittances via Bitcoin is more cost-effective than using regular transmission channels. It is to explain:

Bitcoin use in this country is primarily for remittances of citizens working abroad to their families back home. These citizens rely on bitcoin to transfer funds across borders to avoid the high costs that come with such transactions, and also because most El Salvadorans, i.e. 70 [percent]You don’t have bank accounts.

On why he thinks the cryptocurrency is worth zero, Ciugu uses billionaire investor Warren Buffet’s previous comments about Bitcoin to discuss his point. In his earlier remarks, Buffett noted that crypto assets have the hallmarks of a pyramid scheme because it produces nothing. Just like Buffet, the strategist also believes that bitcoin investors have no expectation of making any future profits except by engaging in zero-sum games with other speculators.

The strategist also points out how Bitcoin collapsed when Elon Musk expressed concerns about the energy use of crypto assets. This reaction according to Ciugu means that Bitcoin is more susceptible to sentiment than actual fundamentals.

The strategist ended this long article by acknowledging that Bitcoin will likely reach the $100,000 level in the near future as some analysts predict. However, Ciugu argues that even if bitcoin reaches such an important milestone, it will have “no effect on the intractable facts” he outlined.

Do you agree with Ciugu’s views? Tell us what you think in the comments section below.

photo credits: Shutterstock, Pixabay, Wikicommons

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