Ever since Bitcoin became a widely recognized asset and people started closely following its price swings and market behavior, the whole cryptocurrency industry entered a frenzied state that arguably has not ended. But are people really using BTC to perform transactions, or is the whole movement mostly speculation on their end?
According to the Chief Executive Officer of crypto exchange Luno Marcus Swanepoel, the vast majority of users in the Bitcoin ecosystem are using the digital asset for investing and speculating. He notes, however, that a tiny percentage of people is still transacting in the network.
Most Users are Speculators or Investors
Swanepoel offered his remarks in an interview with global news site CNBC at the start of the week. Whilst it sounds mind-blowing, he defends the notion that most users are either speculators or investors.
At the moment of writing this piece, Bitcoin’s price was hovering around the $10,300 range. In recent weeks, it surpassed $12,000 and threatened to go off in a similar way that it happened at the end of 2017 and the beginning of 2018, when it reached its all-time high of nearly $20,000.
However, bearish indicators may be beginning to appear for the first time since February 2019; therefore, it is not yet clear if there is another big surge coming in the next few days. What is clear, though, is that the year has been kind to the world’s premier digital asset, considering the fact that it collapsed to nearly $3,100 at some point during the first quarter.
A “Long-Term View”
“Roughly about 90% I would put into the category of investments slash speculations, so it could be people who have a long term view on it, people who like to trade it and about 10% would be transactions,” he said.
Whilst the numbers are not official or backed by a crypto data provider, there seems to be certain legitimacy to them, as it is evident that the vast majority of people currently trading are joining the “crypto fever” and do not want to miss out on a prime investment opportunity that could pay off huge dividends in the future.
According to Swanepoel, at the moment of managing investment portfolios, “it does make sense to put a tiny little bit of money into cryptocurrency.” He defended that notion by saying that despite the high risk, the potential returns are considerable.
Similarities to Early-Day Wall Street
A specialized crypto news site reported in the last few hours that Nelson Minier, the Head of over-the-counter sales at the Kraken crypto platform, stated that the crypto trading field is somewhat similar to what Wall Street was in its early days, but that it is not the right to moment to ensure that Bitcoin is a safe haven for investments.
However, Bitcoin’s name is increasingly coming up in discussions about safe haven assets, often compared with some traditional ones. Investors are seriously considering BTC as a hedge. Regarding that, Morgan Creek Co-Founder Anthony Pompliano recently observed that “we are now at a point where I would argue that it is irresponsible for an investor to have 0% exposure to Bitcoin in their portfolio.”
By Andres Chavez