Bitcoin: virtual currency or digital asset?
Quebex Fintech Inc.
Jul 07, 2017

The crypto market has taken another battering today with most coins showing red following another relatively disappointing week of trading.

This continuing volatility serves only to intensify the ongoing debates over the nature and reliability of bitcoin and indeed all cryptocurrencies and so-called digital assets.

Sheng Songcheng, a counsellor at the People’s Bank of China (PBoC) recently dismissed digital currencies like bitcoin as assets that lack the value basis of a legitimate currency; considering the constantly yo-yoing prices, it’s difficult to argue with him on this point.

Speaking in relation to the effects of a country choosing to adopt bitcoin, or indeed any coin, as a national currency, Songcheng said: “If a country accepts one [cryptocurrency] as its national currency, the entire national economy could collapse due to currency volatility.”

Despite this, the fact remains that many businesses, along with banks and even governments the world over, are choosing to recognize bitcoin as a legitimate form of currency; in light of this, it seems that only time will tell what the economic implications of this will be.

Bitcoin is at $3,256.80 CAD a coin as of 11.30 am, ET, Friday, according to price indexing data from CoinDesk – down 3.39% against the US dollar in 24 hours.

Compared to others – such as ethereum (down 8.09% against BTC), Litecoin (down 7.71% against BTC), Monero (down 6.57% against BTC), Ripple (down 6.63% against BTC) and Augur (down 8.83% against BTC) – bitcoin’s losses have admittedly been relatively modest.

However, it must be said that the days of lucrative altcoin gains, along with bitcoin’s seemingly endless rallying, feel like distant memories right now after another week of, at best, stagnation and, at worst, bearish downtrends which seem to be affecting almost all tokens of late.

Optimistic investors will no doubt be using this opportunity to ‘buy the dips’, whilst other more cautious traders may already have switched their funds to USDT in hopes of avoiding further losses.

For those who don’t know, USDT is a cryptocurrency asset issued on the bitcoin blockchain; each USDT unit is backed by a US dollar held in the reserves of the Tether Limited and can be redeemed through the Tether Platform.

Following a boom period, some investors believe switching to USDT can be a smart way to guard against subsequent corrections; cashing out, so to speak, is always accompanied by the worry of missing out on further growth.

The total coin market cap currently stands at approximately $124 billion CAD, down roughly $6 billion CAD since Wednesday, according to CoinMarketCap.