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There are valid reasons to criticize Bitcoin, but price volatility is not one of them.  Why does the price of Bitcoin change so much from day to day? The answer is simple: the value of Bitcoin derives almost entirely from speculation on future adoption of Bitcoin rather than practical use. Bitcoin speculators are betting on the likelihood that Bitcoin will become offers a credible alternative to fiat paper money or commodities like gold. No one knows the

Forbes Magazine featured Vellum Managing Partner Eric Kovalak in “Here’s What Investors Need To Know About Cryptocurrency“: Crypto Valuation = Philosophy + Technology? Eric Kovalak, a managing partner for Vellum Capital, a hedge fund management firm specializing in crypto assets, says, “People are trying to translate the value of cryptocurrencies into a traditional model where they’d use something like P/E.” While there is a calculation called NVT Ratio (i.e., network value to transactions ratio) that

What is the real market value of cryptocurrencies like Bitcoin? The numbers used to explain the performance of Bitcoin and other cryptocurrencies are less meaningful than most assume. Cryptocurrencies are not exactly like stocks, and cryptocurrency exchanges do not work like traditional securities markets. As a result, many crypto-asset investment strategies based on conventional definitions of market share, capitalization, volatility, and trading volume are deeply flawed. Misleading numbers mean that cryptocurrency valuation and adoption is

Ohio on Monday became the first state to accept bitcoin as a tax payment option for businesses, and United Press International went to Vellum partner David Veksler for the definitive take on the story: “Part of the reason cryptocurrency is so volatile is that nobody knows what will happen to it in the future,” said David Veksler, director of technology at the Foundation for Economic Education, which promotes free-market economics. “It could fail entirely, it

Environmentalists have recently become concerned about the impact Bitcoin mining has on global warming. Headlines such as “Bitcoin Will Burn the Planet Down. The Question: How Fast?” and “Bitcoin Mining Alone Could Raise Global Temperatures Above Critical Limit By 2033” suggest that Bitcoin is an unfolding environmental disaster. However, those panicking about crypto make three fundamental errors. First, they do not understand how Bitcoin works, second, they do not understand what mass adoption would look like, and third, they do not understand the problem Bitcoin is intended to solve.

Jeffrey Tucker discusses the latest market moves in crypto.