The world’s second-worst currency this year is Ukraine’s hryvnia. Being at war with a nuclear-endowed superpower is an expensive business, and Ukraine’s economy is crippled even after an international bailout worth $17 billion.
And the worst is Bitcoin, Bloomberg View reports.
“Bitcoin is second only to gold on the list of topics guaranteed to arouse the wrath of the Internet trolls. Yet relentless promotion can’t hide these facts: The digital currency peaked at a value of $1,130 just over a year ago. Its plunge of more than 56 percent in 2014 makes it the world’s worst performing currency this year, according to Bloomberg, which tracks 175 foreign-exchange values.”
The author of this provocative article, Bloomberg View columnist and member of the Bloomberg View editorial board Mark Gilbert, says:
Join CCN for $9.99 per month and get an ad-free version of CCN including discounts for future events and services. Support our journalists today. Click here to sign up.
“Most of Bitcoin’s supporters [s]eem to be hackers whose resources depend upon the Ponzi-scheme nature of the enterprise itself.”
Gilbert is entirely missing the point, but he isn’t alone. Many Bitcoin supporters who should know better make the same mistake – they think that Bitcoin price is what matters most, but it is what matters least.
Bitcoin transactions have been steadily rising in 2014, and the trend continues to point upward. That means people are starting to use Bitcoin to do things, buy more and more goods and services, as opposed to holding Bitcoin for speculation. As CCN observed in September, use drives down price. But use makes Bitcoin important and encourages more and more venture capital and corporate investments in cryptocurrencies. That’s why in 2014 Bitcoin has been a bad investment for speculators, but a very good investment for venture capitalists.
2014 has been full of high profile investments, by mainstream players, in Bitcoin fintech and startups. Many of these investments will pay off handsomely in the long term, because Bitcoin will become important and bring disruptive change to finance. That’s what really matters, not Bitcoin price.
Images from Shutterstock.