One of the most common questions towards the crypto market at the moment is: What is the biggest threat to Bitcoin? While there are a lot of issues surrounding a lot of industries at the moment, this seems to be the most widespread. The reason for that is simple; the global markets are falling, and Bitcoin, as with the other coins, is no exception.
Ever since the December 15th, 2017, when BTC peaked at $19,650, the question of its ability has increased, especially when it fell back to $3,183. However, with the increasing price, we have wondered what will ever make the cryptocurrency fail.
What is the Biggest Threat to Bitcoin?
I feel like there are many threats to the crypto, and depending on which broker you speak to, you may find different answers. However, as we are not hearing from them, you will have to have my opinion.
Libra
If you have never heard of the Libra Association, then it is likely not going to be long until you do. They have some pretty bold claims, all of which, if materialized, could possibly destroy the need for Bitcoin, and many other cryptocurrencies.
Many of the initial backers of Libra have pulled out. That makes it easy to think that there will be no more competition. However, Facebook’s Mark Zuckerberg and the team behind the Libra Association are not wanting to give up just yet. So, what makes the Libra such a threat? Shopify - they have joined as one of the most prominent investors of the project, and it was only on February 21st, 2020.
With the massive sum of $10 million to invest and the bigger 1 million businesses that they will bring with ShAs a member of the Libra Association, we will work collectively to build a payment network that makes money more comfortable to access and supports merchants and consumers everywhere. Shopify, the threat is very real to BTC. Shopify posted this on their blog:
As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere.
That leads us to believe that, with the 175 countries (only 20 less than the entire world) that Shopify serves, all cryptocurrencies could be on a downward spiral towards defeat. However, there is one considerable threat that still looms.
Regulation
Regulation has always been a threat to cryptocurrency. However, with the somewhat recent outburst of Donald Trump on Twitter, it appears that there will be a massive problem with passing crypto as a widespread currency in the US. Of course, that difficulty will be directed towards Bitcoin as much as any other.
The difficulties do not stop there, though. In India, for example, tax investigators raided multiple bitcoin exchanges throughout the country, causing massive disruption, and even causing companies to cease trading. That action was justified through section 133A of the Indian Income Tax Act, and it is not the only raid of its kind. Similar things happened in South Korea, and there are reports of raids of a similar nature in China. However, Binance has called the China raid “false” as they do not hold an office there.
What that does lead us to think, though, is that instead of competing with cryptos such as Bitcoin, many countries will try to regulate them out of subsistence. That has not stopped people buying coins, and it probably won’t until it is too late. When the “too late” point is, no one really knows if it even comes.
Adaptation
Unless the Libra Association completes all of the goals it has set, the adaptation of any crypto is limited, and that is the same even for the biggest in the world, Bitcoin. Although BTC has moved a long way in the past ten years, it still has longer to go before becoming a worldwide “accepted” currency. The real difficulty is that it has to adapt more than the banks can adapt legal tender.
More countries are beginning to move away from cash as a physical entity as it is. However, the legal tender aspect of the money is not changing. The difference is that no matter who owns that money; the banks, governments, or crypto exchanges(even with robots), the owner of the most extensive infrastructure will take charge. At the moment, that is still the banks and governments. That leads us to the question, which will be the superior way of monetary transfer?
The truth is that it will be the method that offers the following in the best way:
- Trust
- Efficiency
- Stability
- Flexibility
- User sociability
Here is a screenshot of USD to GBP price over the last five years:
Bear in mind that the graph looks like it changes a lot, but it is only varying between 0.63 and 0.85. Now, let’s take a look at BTC over the same period:
BTC goes between 0 USD and extremely close to $20,000 in the same time.
Conclusion
As those graphs show, BTC has a long way to go before people are going to trust it as a currency with stability. So that means that Bitcoin needs to excel in the other three points to stand a chance. That is without the threats of Libra and regulations. If you would like to learn more about the ways to use crypto, check out the guides section.