Financial analyst firm, Weiss, has rated bitcoin as a ‘failed currency’ based on the current trend of BTC losing favor as a currency in real life. Despite the negative rating, it forecasts crypto assets to be a great addition to investors’ stock portfolio.
In a cryptic tweet, the premier analyst firm has said that bitcoin has not lived up to initial expectations of being a ‘P2P’ electronic cash and has thus failed in the primary role it was expected to perform – become an everyday transaction currency.
Sadly, Weiss Ratings said, bitcoin’s use is now for purposes of speculation, though it is not the fault of BTC that it has become so.
An influential-participant in fiat-currency circles such as financial institutions, firms, institutions, and similar investment players, Weiss Ratings has lately begun to offer crypto-specific activities as clients were becoming increasing crypto curious and wanted analysts reports on these virtual currency assets.
Weiss now offers crypto asset services, has a chart to rate crypto assets as well as real usability in terms of the role digital asset serves in the near future. The rating agency believes the trend that these assets have set for themselves is as follows:
“The asset with the lowest correlation with traditional asset classes — the S&P 500, the dollar, international equities, bonds, commodities and even gold — is cryptocurrencies.”
The main analyst at Weiss on cryptocurrencies was Tony Sagami who reasoned BTC’s failures as a payment means was due to the ‘volatile price.’ Secondly, not many merchants are clearly sold to the idea of cryptocurrencies and do not use it as a strong alternative.
Very few who do introduce it view it as an option for the ‘novelty’ rather than as a true value-adding currency. In the process customers who are interested in adopting any of these currencies is not able to do so, and have to constantly switch between fiat currency and these virtual currencies.
Purists and loyal BTC users believe that the ‘true value’ of BTC is in its ‘store value’ and not as a transactional medium. But other coins have learned their lessons from the failure of BTC in becoming a household currency.
Altcoin networks of smaller value to BTC have introduced mechanisms which improve the crypto payment scenario. They have made their currencies cheaper, easier and more intuitive.
While purists pursue the ‘store value’ approach, the low usage of BTC has meant there is a paradox. Hashrate is now at an all-time high and thus low use does not really make much sense.
At the same time, there is no actual dependency between mining and the real-time use of these coins. These coins follow mining as well as exchange speculation in terms of rewards, principles as well as incentives which are not related to the actual BTC spending.
Additionally, miners are merely merchants and do so for explicit purposes of covering costs. Moreover, BTC lacks a real economy. Thus far it has been a niche goods player. The low-rate of supply is definitely a stumbling block for mass adoption of the coin, and translate the store-value for transactional purposes.