Bitcoin could collapse due to its vulnerability

Bitcoin is speculative among several economists
  • Bitcoin price vulnerabilities can cause the token to collapse completely
  • Stablecoin is now more credible than the flagship cryptocurrency
  • The central banks globally are researching CBDCs

Bitcoin (BTC) remains the best performing crypto asset in recent months. Agustin Carstens, manager of the Bank of International Settlements (BIS), has warned investors to carefully invest in the leading crypto token after observing its performance. 

Bitcoin is speculative among several economists

Recently, observing the performance of Bitcoin, many high profile economists and economists are sceptics regarding the token. The BIS manager has warned about the dangers of investing in the cryptos. The former finance secretary cautioned regarding the token is increasingly vulnerable and can collapse completely. On Wednesday, during a Hoover Institution policy seminar, the Mexican economist considered the ticket a speculative asset and not money.

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Following all, Carstens explained that investors should be aware that BTC can completely collapse. Additionally, scarcity and crypto alone are not enough to guarantee exchange, as Bitcoin is increasingly vulnerable.

Are stablecoin projects more credible than BTC?

According to Carstens, other private stablecoin projects like Facebook’s Libra (now Diem), are more credible than the leading crypto token Bitcoin. Generally, such personal fiat pegged tokens cannot serve as the foundation for a sound monetary system. Indeed, to remain credible, such stablecoins need to be strictly regulated and supervised. According to Carstens, such tokens must be built on the foundations and confidence that the existing central banks offer to be a part of the traditional financial system.

Majority of major central banks are targeting CBDCs

It is observed that almost 86% of the major central banks in the world are actively exploring the central bank digital currency (CBDC). Carstens shows that national digital currency would be used in various ways like transmission of monetary policy and interests management. Such CBDCs should complement the existing cash system, as completely replacing all cash with digital currency is undesirable and unrealistic.

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Andrew Smith
Andrew is a blockchain developer from his education and developed his interest in the cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer.

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