Tue, 14/11/2017 - 09:49
Bitcoin expert Nicholas Gregory, founder and CEO of London-based cryptocurrency enabler CommerceBlock, comments on recent volatility in cryptocurrency prices…
Prices of digital currencies have been on a rollercoaster ride lately but this violent volatility is actually all a bit of a sideshow.
The simple reason is that plenty of people hold billions of pounds worth of cryptocurrency right now at no risk. That's because they are using hedging or short positions to cover losses that might occur before they are able to convert their money into pounds and pence. This is common practice for businesses using traditional currencies and it's no different for Bitcoin, Bitcoin Cash or any other digital currency.
Those firms who got paid last week by a client and have a hedge in the market wouldn't lose any sleep if the price dropped 90 per cent. It is these companies, who understand Bitcoin has a real-world application, who will ensure cryptocurrencies' long term survival.
The people making all the noise as the price makes sudden swings are the only ones who stand to lose. They are the currency speculators and, just as in the traditional FX markets, there will be as many winners as losers among them.
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