Bitcoin has showcased sluggish price action after the approval of the first set of spot Bitcoin ETFs this month. On Monday, BTC slipped below the crucial level of $40,000 after losing 5% of its value in a day.
While some criticism mounts against the SEC’s decision to approve the ETPs, opponents also get a chance to say that there is no recovery for Bitcoin beyond this level.
Also Read: Jim Cramer Doubts Bitcoin Recovery After ETF Introduction
Despite facing typical industry challenges, ARK Invest successfully argues for Bitcoin’s fair value. Yassine Elmandjra from the investment firm countered skepticism from notable figures and organizations like Jamie Dimon, Vanguard, and UBS, who have raised concerns about Bitcoin’s control, volatility, and practicality, by effectively debunking their doubts.
Understanding Bitcoin’s backing and value
Contrary to claims of Bitcoin being ‘backed by nothing,’ Elmandjra argued that it is actually supported by the world’s most powerful computing network.
With a staggering 500 exahashes per second, ARK notes that the network surpasses the computational capabilities of even the largest global computing systems.
Recently, Bitcoin surpassed 650 EH/s to touch a record peak. At the time of writing, the value stands at 551 EH/s.
As decentralization is the core feature of the cryptocurrency community, the distributed network makes a case for itself.
“This computational power isn’t centralized in one location or controlled by a single entity. It’s distributed across a global network, ensuring decentralization and resilience against attacks or failures,” Elmandjra added.
Proponents also make the case that dismissing Bitcoin’s lack of intrinsic value overlooks its potential role as a global digital currency. Especially considering its market capitalization of around $800 billion, it is hard to ignore.
Addressing Common Misconceptions
Elmandjra also circled on Bitcoin’s energy consumption, often criticized as wasteful. He argued that it is actually a strategic allocation to sustain a network pivotal to the future of money. Additionally, BTC’s transaction speed, perceived as slow, is a deliberate choice prioritizing security and decentralization.
ARK’s Elmandjra also echoed that the volatility in Bitcoin is not a flaw but a testament to the credibility of its monetary policy. Moreover, he added that the concerns over its use in criminal activities overlook its fundamental attribute of censorship resistance.
“Governments can’t stop Bitcoin. They can only stop themselves from using it,” he added.
Lastly, the fear of Bitcoin being controlled by its creator, Satoshi Nakamoto, is unfounded.
While there is a lot of misinformation around Bitcoin, it also has some inherent risks that make it very speculative. Its decentralized, secure, and innovative nature challenges traditional financial concepts, but investors need to be cautious while making risky investments.
Also Read: Crypto Market Selloff: $100M Liquidated Amid Profit-Booking and ETF Volatility
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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