The recent bitcoin selloff has spooked plenty of investors, with one expert even claiming that the sharp move has hurt the first and foremost cryptocurrency’s legitimacy.
Lawrence Shover of SFG Alternatives told “Bloomberg Markets” that Bitcoin’s primary problem right now is that there are still too many questions surrounding it — making it little more than a speculative instrument for money-hungry investors. He explained:
Let’s consider it’s a market that’s still dominated by speculators who love volatility. We still don’t know whether it’s a commodity or a currency, so it’s hard to get a technical range on it. And if it is a currency — a replacement for fiat — it’s doing a very poor job as a store of value. What is it correlated to?
Of course, if Shover or anyone else wants to truly know what Bitcoin is, all they need to do is take a look at the whitepaper. (Spoiler Alert: it’s “A Peer-to-Peer Electronic Cash System.”)
Regarding Bitcoin’s technicals, Shover had this to say:
So there’s a lot of people out there who think we’re through a support level and the next one’s about $6000. Hard to know, but I think it’s also a market that’s just so desperate for legitimacy. […] The masses are actively looking for legitimacy to trade it themselves, and yesterday was a severe blow.
A severe blow to whom, exactly?
Sure, the sudden selloff in Bitcoin might have hurt those retail investors who only talk about Bitcoin around the office water cooler when they caught wind of a price increase — but it certainly didn’t hurt many people who actively and astutely trade the market.
The recent Bitcoin “rally,” if you can call it that, was just begging to be shorted. Technical indicators like the daily Stochastic RSI had been hanging out in overbought levels for weeks, and there was no volume to support the upwards moves that had already taken place.
Those who did short the market certainly haven’t been dealt a severe blow. Rather, they’re likely grinning ear to ear of the massive profits they made in a 24-hour span.
The fact of the matter is, Bitcoin doesn’t need legitimacy from Shover or anyone else. Bitcoin is already legitimate to the people who use it, believe in it and profit off of it.
What do you think about Bitcoin’s legitimacy? Let us know in the comments below!
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