The co-founder of the Bitcoin Foundation has spoken out and said that bitcoin is not in a bubble. Accordingly, that lies with the global bond and stock markets.
Speaking in an interview with Business Insider, Jon Matonis, who helped found the Bitcoin Foundation in 2012, dismissed claims that the market is in a bubble. He said:
To the people who say bitcoin’s a bubble, I would say bitcoin is the pin that’s going to pop the bubble.
According to Matonis, the real bubble can be located within the bond and equity markets, which, Matonis states, are being ‘propped up by the central banks.’ Speaking at an Innovate Finance conference in London earlier this month, the co-founder explained that the market is entering a ‘post-legal-tender age,’ which isn’t being driven by central banks. In his opinion, it is cryptocurrencies such as bitcoin that will lead this change, stating:
Hard-coded into the original block zero, genesis block, of bitcoin was a headline from The Times of London saying, ‘Chancellor on the brink of second bailout for banks.’ All they’re doing is papering over the bulls infrastructure. That headline epitomizes what bitcoin is about – that’s why it was hard-coded in there.
Matonis believes that the market will be less volatile with the aid of major banks entering the cryptocurrency fold. He said that it will bring in more liquidity and help ‘mature the market.’ However, he doesn’t think that the industry should be regulated. Instead the onus should be on the individual to make sure that they have done their research before putting money into a project.
I think we should operate in an environment of caveat emptor: Let the buyer do his research. This hopefully has forced a lot of investors to do more research. No one is forcing them to invest in ICOs. If you’re worried about the risk, just walk away.
Many authorities, however, are considering a regulatory approach designed to protect investors and the market. In February, it was reported that a U.S. Treasury official had called for more countries to put cryptocurrency regulations in place to protect the financial system and national security. Whereas, Christine Lagarde, the chief of the International Monetary Fund (IMF) has expressed the view that it’s ‘inevitable‘ that cryptocurrencies will fall under government regulation.
Despite this, though, Mark Carney, the chair person of the Financial Stability Board (FSB), which regulates the G20 nations, and the Governor of the Bank of England, said last month that digital currencies don’t pose a risk to the global financial stability. This is because of the relatively small market value of the combined market compared to global GDP.
Featured image from Flickr via Ideaaaaa.
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