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Bitcoin Doesn’t Need a Use Case, BTC Being Digital Gold is Enough

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Bitcoin Doesn’t Need a Use Case?

For a while now, investors have been trying to attribute use cases to Bitcoin. Unlike traditional stocks and assets, Bitcoin doesn’t provide a fixed yield, a dividend, or generate cash flow. And compared to traditional and modern fiat currencies, BTC isn’t backed by the power of a government or the scarcity of an underlying asset. The foreign elements of the cryptocurrency have thus led most traditional investors to cast it aside, calling it “useless” or backed by nothing but “thin air”. Those that are interested in Bitcoin have been trying to assign it a use case (or potential use case) as a means to chart its value.

But, according to Michael Novogratz of Galaxy Digital, Bitcoin already a use case, a use case that he claims is its raison d’être: digital gold.

Speaking in a recent interview with Bloomberg, the former Wall Street investor suggested that “Bitcoin doesn’t need a real use case”, as it, in his eyes, is already a form of digital gold. He said that it is essentially the only cryptocurrency that sports a fully-fledged use case in today’s world. Novogratz added that the classification as digital gold is what has allowed Bitcoin to outperform its altcoin ilk over the past year.

Novogratz’s comment is quite reminiscent of those made by some other leading investors. Chamath Palihapitiya, a former executive of Facebook and venture capitalist, told CNBC earlier this year that Bitcoin is the perfect hedge “against the traditional financial infrastructure”. He elaborated that if fiscal or monetary policy is wonky, as it arguably is now, having Bitcoin is like “the schmuck insurance you have under your mattress”.

But, there has been some recent contention to the theory that Bitcoin is the world’s next go-to store of value.

During the stock market crash seen late last year, the chief executive of pro-innovation ARK Invest, Cathie Wood, suggested that during global scares, “people sell their most experimental assets, such as bitcoin and other cryptoassets” (quote from Chris Burniske, who paraphrased Wood).

The two sides continue to be at odds. But, once the next recession hits, the market will finally see whether or not Bitcoin works as a long-term store of value.

Crypto Market to Resume Uptrend

In the same interview, Novogratz indicated that he expects for Bitcoin to head higher once again, even after yesterday’s crash. He stated that institutions are finally starting to enter into the cryptocurrency game, and will thus drive up the price of Bitcoin. Like many others in the industry, he believes that this class of investors will bring in monumental levels of capital to this space, outpacing any retail investors that came before them. He also stated in an earlier interview:

“I’m not selling the next time we hit $14,000. The second time we reach that level, [there may be] a move to $20,000. I don’t expect this to happen in the next few weeks: I don’t expect it to the middle or the end of the fourth quarter. But the next wave will come when the institutions — the state of X, Texas Teachers Union, and those guys — come in, and then you will see Bitcoin hit $20,000 and higher.”

Photo by LEMUR on Unsplash

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