Dieter Wermuth’s View on Bitcoin
• Dieter Wermuth, a noted economist and partner at Wermuth Asset Management, believes Bitcoin is a wasteful investment that takes away money from more valid sources of economic growth.
• Wermuth notes that Bitcoin cannot be widely used as a form of payment due to its volatility and lack of tax utilization.
• He also suggests that the market capitalization of Bitcoin in 2021 was comparable to that which triggered the 2008 financial crisis.
Background on Bitcoin
Bitcoin has been experiencing a rollercoaster ride since late 2021 when it reached an all-time high of around $68,000 per unit. Unfortunately, only months later the asset lost over $20,000 during early 2022 and continued to depreciate until the end of the year when it fell into the mid-$16K range – losing more than 70 percent of its value. However, in recent months there has been progress for BTC but still much further to go before reclaiming its former glory.
Dieter Wermuth’s Criticism
Economist Dieter Wermuth has recently voiced his opinion on why he believes bitcoin is pointless and should be forgotten about for the time being. He expressed that bitcoin activities are negative-sum games and without crypto, the economy would benefit more from consumption and investment opportunities elsewhere. He also pointed out how BTC was introduced with promises of being a better form currency than traditional money but this idea has been proven false due to its instability and impracticality as payment method not suitable for taxes or other forms of transactions.
Overall, Dieter Wermuth believes investing in bitcoin is not beneficial for economic growth nor does it have any real purpose in modern society as a viable form of payment or currency alternative. He suggests that investors should look towards other investments with greater potential returns instead of wasting their funds in an unreliable asset like bitcoin which could ultimately lead them to losses instead of gains.
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