Bitcoin is an ideal asset for speculation, and it is because of this that we are seeing its growth. This was stated by co-founder of Insider, businessman Henry Blodget on CNBC.
He believes that the first cryptocurrency has no intrinsic value and its price depends on how much people are willing to pay for it.
„You can tell ridiculous stories that bitcoin is a way to preserve value, and its value must be some percentage of the price of gold, but the issue of bitcoin is limited,“ Henry Blodget pointed out.
In his opinion, it is investor excitement about bitcoin that is pushing its price up:
„More and more people are buying an asset with limited supply and literally no capitalization. Bitcoin can rise to $1 million because it will be worth exactly what someone will pay for it,“ he explained.
Blodget stressed that unlike stocks, bitcoin aussie system lacks a tie to the future cash flows the asset generates.
„If you look at stocks of FAANG companies, they trade at 30 to 40 times earnings. Those are high multiples, but it’s not crazy. It’s based on cash flow. Most of the profits in the economy will go to these companies,“ Blodgett said.
In conclusion, the businessman added that he initially wanted to see the first cryptocurrency as something more than a speculative asset. For example, the ability to switch completely to paying in bitcoin or to do all cross-border transactions in bitcoin.
„But for most people, it’s just a more preferable means of savings than fiat,“ he believes.
Earlier, Evgeny Kogan, a professor at the Higher School of Economics, said that traditional models for predicting future returns do not work for cryptocurrency investments.