Bitcoin is the perfect asset for speculation, and it is precisely for that reason that we are seeing its rise, said Insider co-founder and businessman Henry Blodget on CNBC.
He argues that the first cryptocurrency has no intrinsic value and its price depends on how much people are willing to pay for it.
“You can tell ridiculous stories that Bitcoin is a store of value and that its price should be some percentage of gold’s price, but Bitcoin’s supply is limited,” Blodget said.
In his view, it is investor enthusiasm surrounding Bitcoin that is pushing its price higher:
“More and more people are buying an asset with a limited supply and literally no market capitalization. Bitcoin could rise to $1 million, because it will be worth exactly what someone pays for it,” he explained.
Blodget emphasised that unlike stocks, Bitcoin lacks a link to future cash flows generated by the asset.
“If you look at the FAANG stocks, they trade at 30-40 times earnings. These are high multiples, but it’s not madness. It’s based on cash flow. The bulk of profits in the economy will go to these companies,” Blodget said.
In conclusion, the businessman added that in the beginning he had hoped to see in the first cryptocurrency something more than a speculative asset. For example, the possibility of moving entirely to payments in Bitcoin or conducting all cross‑border transactions in Bitcoin.
“But for most people it’s simply a more preferred store of value than fiat,” he says.
Earlier, Evgeny Kogan, a professor at the Higher School of Economics, stated that for investments in cryptocurrencies do not work traditional forecasting models of future profits.
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