Cryptocurrencies are still in breaking news. However, the debate on whether they are money goes on and on.
The Oracle of Omaha, Warren Buffett, that cryptocurrency speculations will go really bad. CoinMarketCap informs, that the rate of dogecoin, that was valued $2 billion, has plunged to $1,5 billion by Wednesday.
The digital currency has inflated more than any other in the financial market history. Yet, it looks like a giant bubble ready to explode at any moment.
There are many ironic moments in cryptocurrencies description.
Firstly, cryptocurrencies are discussed in the terms of U.S. dollars. But when selling or buying it, they start trading one against another. All of them are cross-traded, like pricing a value of the dollar against yen or euros. These exchanges look understandably on a computer screen, but in practice, the usage of the dollar is much more convenient.
Bonus: Lending Money Against Bitcoins.
Secondly, the dollar is still the main reserve currency worldwide. All world economic transactions are carried out in dollars. Money supply of the nation (M2) amounts to $14 trillion.
Though cryptocurrencies value has reached $600 billion, it is still hard to exchange it into a cold, hard coin.
Wealth of Cryptocurrency Founders is Measured in U.S. Dollars
It is hard to believe, but digital tokens holders talk about their currency in terms of U.S. dollars, not digital coins. The owners never announce how many bitcoin they have. And even if they do, they claim it in U.S. dollars. A bit ironic, isn’t it?
The Winklevoss twins are the first billionaires from cryptocurrency owners.
Digital coins trend is relatively fresh and should be compared to the currency we know. Maybe in a decade dollar will get old-fashioned and bitcoin will replace it.
But it is a hard path to walk. Economic history recognizes only several reserve currency forms: gold, pound sterling, franc and U.S. dollar.