- John Todaro finds an opportunity in the recent business developments that have fluctuated the Bitcoin prices
- China’s crackdown and EL Salvador’s adoption are factors that evolve and prepare Bitcoin for the future
- Todaro believes China to be an outsider for Bitcoin evolution in the financial industry
Cryptocurrency is a volatile matter in the financial market. With so many countries developing different kinds of policies to adopt the new wave of change, coins like Bitcoin are evolving even more. Bitcoin has seen a paradigm of changes since its origin. Since then, economies around the world have accepted, rejected and modified its existence in their respective territories. Considering the long term survival and development of Bitcoin, the market dips, government regulations and bans are only going to have a positive effect on Bitcoin.
Bitcoin acceptance and rejection by countries will only help Bitcoin to grow
John Todaro, Vice President at a New York based investment bank and asset management company, Needham & Company, believes that the recent developments faced by Bitcoin will have an unfaltering effect on the cryptocurrency in the long run. Bitcoin is being perceived as a boon and bane for different regions across the globe. In China, the ban has been growing stricter with days passing by while in middle eastern and african countries, Bitcoin comes as a survivor to save the fiat money from further devaluation. According to Todaro, the negatively perceived Bitcoin in areas like China, will end up having an affirmative impact in the distant future.
Bitcoin ban is a part of the development process
The Chinese ban on Bitcoin mining affected the hiked prices to fall down consistently. Miners that were being pushed out of the country also faced difficulty in finding new lands for their mine farms. Around 90% of the Bitcoin mining capacity of China was predicted to close down after the government in the south western Chinese province of Sichuan ordered the ban on crypto mining. With this, Bitcoin mining faced a 50% decrease in the network hasrate following the Chinese crackdown on Bitcoin mining, according to Todaro. Todaro believes that the decentralization of Bitcoin mining has caused a short-term volatility in crypto assets, however, it will be a positive change for crypto in the long haul.
China stands an outsider for Bitcoin development
Todaro mentions that with only China imposing a heavy rule on Bitcoin mining, others operating outside the Chinese borders have been able to continue their operations with tremendous amounts of profit margins. Most of the current price fluctuations of Bitcoin roots from trading and speculation, but some of it stems from funds looking at Bitcoin as an alternative store of value to gold, according to Todaro. Contrary to China’s take on cryptocurrency, El Salvador lawmakers voted in favour of a Bitcoin law allowing the Central American country to adopt the cryptocurrency as legal tender. Todaro believes that China is not the primary concern and is an outlier in the regulation of cryptocurrency and many other countries will actually have a positive impact on the space.