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This is what some economists are getting wrong about Bitcoin

by firstcryptonews
March 17, 2021
in Industry
This is what some economists are getting wrong about Bitcoin

The intrinsic value of an asset determines its long-term existence in the market. The ‘spicy’ flavor is the intrinsic value for jalapenos and it is tangible, and it can be felt or estimated. Now, for a long time, some economists have been unable to associate Bitcoin with any such fundamental merit. Ergo, it’s no wonder why they describe the digital asset as one that carries no intrinsic value.

Hanke made an interesting point here, but it is important to look at the narrative from all perspectives. Remaining confined to one train of thought won’t do.

Bitcoin: An intrinsic value derived from evolving markets?
A recent Ecoinometrics report took a stab at the discussion involving Bitcoin’s intrinsic value and according to its definition, the intrinsic value of an asset is derived by means of objective calculation, rather than by using the market value of the asset.

The report, however, didn’t clarify what ‘objective calculation’ exactly means. Hence, it will possibly depend on the financial model or persons performing the calculation. For instance, while Hanke’s ‘objective calculation’ entitles BTC with zero fundamental value, PlanB’s financial model, one strictly calculated based on scarcity, predicts a value of $288k for the asset by the end of this bull cycle.

So, the argument remains – Which objective calculation enjoys greater importance? While Hanke may be a big name in the field of Economics, he is possibly analyzing Bitcoin within the same limits as fiat currencies or any other commodity. Bitcoin economics, on the contrary, is probably a little more reflexive, and it isn’t limited to a pre-defined assumption of value.

Right now, Bitcoin has value like fiat has value. The value of fiat money is essentially derived from the relationship between supply and demand, and it is stabilized by the issuing government. It is not back by gold or silver or any commodity. It is the trust of the people that makes fiat valuable.

BTC, more or less, is the same. While this discussion would have had fewer points back in 2017, in 2021, there is enough data to support that Bitcoin is continuously receiving more support and more adoption.

In fact, data from Statista.com indicates that Bitcoin blockchain wallets increased from around 22 million in January 2018 to 68.24 million towards the end of February 2021. Further, the total number of Bitcoin traders increased to 53 million in 2021, while presently, the Bitcoin network is processing 306,335 transactions per day.

Intrinsic value or not?

While economists have suggested that Bitcoin has more speculative value than fundamental or intrinsic value, it is important to note that some institutions being guided by these economists are currently buying Bitcoin for their balance sheets. The ‘jury’ might be still out on Bitcoin’s intrinsic value, but if 50-100 million users are acknowledging its merit, fundamentally, it cannot be zero.

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NYDIG, a leading bitcoin financial services firm, has announced that it will welcome the CFO of Bridgewater Associates John Dalby to its team. Dalby joins NYDIG as the new Chief Financial Officer (CFO) in what represents one of the biggest personnel shifts from the mainstream financial industry to the crypto world.  Contributing to the Greater Good  The new CFO held a similar position at Bridgewater Associates, the world’s largest hedge fund, before his appointment to NYDIG. Dalby said that he is delighted to join the team and was committed to helping NYDIG deliver innovative Bitcoin solutions to individuals and institutions.  The former CFO of Bridgewater Associates joins NYDIG during a period of rapid growth. The leading provider of investment solutions for BTC recently raised over $200M in additional capital from a group of strategic partners. The funds came from top institutions such as Morgan Stanley, MassMutual, New York Life, Liberty Mutual, Stone Ridge Holdings Group, and more.  NYDIG also launched a global Insurance Solutions practice that will spearhead the development of bitcoin-powered products and services for the global insurance sector. According to Robert Gutmann, Co-founder of NYDIG, Mr. Dalby brings deep financial services experience to help the crypto custody firm build institutional solutions that deliver BTC safely to everyone.  NYDIG to Help US Banks Offer Bitcoin In what has been viewed by many crypto enthusiasts as another step toward crypto’s mainstream adoption, NYDIG has unveiled an industry-first bitcoin solution for banks.  Rolled out in partnership with fintech giant Fidelity National Information Services, the new product will enable clients of some U.S. banks to buy, hold and sell BTC via their existing accounts.  According to Patrick Sells, head of bank solutions at NYDIG, hundreds of smaller US banks have already agreed to participate in the program. The firm is now engaging some of the leading U.S. banks to join in and enable ordinary Americans to get access to BTC through their existing bank relationships.  Until now, many BTC adopters have been forced to go outside of their traditional banking relationships to acquire the benchmark cryptocurrency.   The vast majority of traditional banks have steered clear of offering bitcoin to their retail customers. Therefore investors often rely on crypto-centric companies like Coinbase or payment giants such as Square and PayPal to purchase bitcoin.  The revolutionary solution from NYDIG will facilitate banks to offer crypto assets to their retail banking clients via a seamless, easy-to-use digital experience.  More Banks Are Asking For Bitcoin Top Wall Street banks only recently warmed up to crypto and unveiled plans to allow their wealth management clients bet on bitcoin. However, they have so far refrained from offering the service to retail customers.  Nevertheless, more traditional banks are now asking for bitcoin as demand for the asset mounts from retail banking customers.  According to Yan Zhao, president of NYDIG, these banks are under increasing pressure to offer BTC to their clients as its reputation as a store of value continues to grow.  “This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data.’ They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world,” Zhao noted.  The NYDIG head predicts that giant banking institutions could soon face pressure to offer bitcoin to more clients as smaller banks roll out their own crypto services.

NYDIG, a leading bitcoin financial services firm, has announced that it will welcome the CFO of Bridgewater Associates John Dalby to its team. Dalby joins NYDIG as the new Chief Financial Officer (CFO) in what represents one of the biggest personnel shifts from the mainstream financial industry to the crypto world. Contributing to the Greater Good The new CFO held a similar position at Bridgewater Associates, the world’s largest hedge fund, before his appointment to NYDIG. Dalby said that he is delighted to join the team and was committed to helping NYDIG deliver innovative Bitcoin solutions to individuals and institutions. The former CFO of Bridgewater Associates joins NYDIG during a period of rapid growth. The leading provider of investment solutions for BTC recently raised over $200M in additional capital from a group of strategic partners. The funds came from top institutions such as Morgan Stanley, MassMutual, New York Life, Liberty Mutual, Stone Ridge Holdings Group, and more. NYDIG also launched a global Insurance Solutions practice that will spearhead the development of bitcoin-powered products and services for the global insurance sector. According to Robert Gutmann, Co-founder of NYDIG, Mr. Dalby brings deep financial services experience to help the crypto custody firm build institutional solutions that deliver BTC safely to everyone. NYDIG to Help US Banks Offer Bitcoin In what has been viewed by many crypto enthusiasts as another step toward crypto’s mainstream adoption, NYDIG has unveiled an industry-first bitcoin solution for banks. Rolled out in partnership with fintech giant Fidelity National Information Services, the new product will enable clients of some U.S. banks to buy, hold and sell BTC via their existing accounts. According to Patrick Sells, head of bank solutions at NYDIG, hundreds of smaller US banks have already agreed to participate in the program. The firm is now engaging some of the leading U.S. banks to join in and enable ordinary Americans to get access to BTC through their existing bank relationships. Until now, many BTC adopters have been forced to go outside of their traditional banking relationships to acquire the benchmark cryptocurrency. The vast majority of traditional banks have steered clear of offering bitcoin to their retail customers. Therefore investors often rely on crypto-centric companies like Coinbase or payment giants such as Square and PayPal to purchase bitcoin. The revolutionary solution from NYDIG will facilitate banks to offer crypto assets to their retail banking clients via a seamless, easy-to-use digital experience. More Banks Are Asking For Bitcoin Top Wall Street banks only recently warmed up to crypto and unveiled plans to allow their wealth management clients bet on bitcoin. However, they have so far refrained from offering the service to retail customers. Nevertheless, more traditional banks are now asking for bitcoin as demand for the asset mounts from retail banking customers. According to Yan Zhao, president of NYDIG, these banks are under increasing pressure to offer BTC to their clients as its reputation as a store of value continues to grow. “This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data.’ They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world,” Zhao noted. The NYDIG head predicts that giant banking institutions could soon face pressure to offer bitcoin to more clients as smaller banks roll out their own crypto services.

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