Post
Topic
Board Speculation
Re: Guys, relax. This up down volatility is all 100% perfectly normal
by
Wuji
on 12/04/2013, 14:58:42 UTC
Bitcoin is both a currency and a commodity.

From CNN

https://medium.com/money-banking/2b5ef79482cb

Quote
In reality, then, bitcoin doesn’t really behave like a currency at all. In terms of its market value, it looks much more like a highly-volatile commodity. That’s by design: bitcoins were created to be the most fungible commodity the world had ever seen – to the point at which they would effectively erase the distinction between a commodity and a currency.

But is that a good idea?

So yes, bitcoins are both apples and oranges at the same time. Maybe that is part of its value.

Yes people are able to abuse it like a commodity because it does not yet heavy usage.  You would need trillions of dollars to even begin to affect a real currency like the USD and even then the Fed Reserve could take counter measures.  Since Bitcoin is does not have enough adoption it is being treated as a commodity.  The problem is that beyond currency Bitcoin does not actually have a use.  Oil, Bananas, Gas, Frozen concentrated orange juice, Gold, Silver are commodities that are tangible and have a use beyond being used as a currency (although they can be used as currency and some have).  Hell even paper money can keep you warm in a fire or wallpaper your house (just ask the Germans).

This is why Bitcoins are probably really only worth less than $10, lack of adoption.  Not $1000 or $10,000 as speculators would love for you to believe.  Don't buy into they hype and if you do expect to lose your shirts unless you are smart enough to buy low and sell high.  I stopped buying last time at $14 and sold at $230.