‘Bitcoin Is Worth Zero’ Says Kenyan Communication Strategist
Ciugu, a Kenyan communications strategist, insists in an op-ed published by The Elephant that bitcoin (BTC) is structurally incapable of fulfilling its promise of becoming an alternative store of value or a hedge against inflation. Furthermore, the strategist claims bitcoin fails as both a currency and an investment.
Although he admits that Africa has one of the highest rates of cryptocurrency adoption, Ciugu warns that the top cryptocurrency’s volatility and scalability issues mean it cannot be used as a currency. Ciugu is quoted as saying:
Bitcoin fails as a currency because of two things: volatility and scalability concerns. In its 12 years of existence, bitcoin has maintained extremely high levels of volatility i.e. 60 per cent to 100 per cent annualized.
To bolster his case, Ciugu cites the US dollar, which he claims has “an annualized volatility of 17.” Concerning the coin’s scalability issues, Ciugu regurgitates the standard arguments about the crypto’s inefficient utilisation electricity and how this discredits it as a currency for day-to-day payments.
Meanwhile, the strategist denies that BTC is now widely used in El Salvador, the world’s first country to declare the cryptocurrency legal tender. According to Ciugu, the US dollar remains El Salvador’s dominant currency. Despite making these arguments, Ciugu agrees that sending remittances via BTC is more cost-effective than using traditional sending channels. He elaborated:
“The use of bitcoin in that country is primarily for remittances by citizens working abroad to their families back home. These citizens rely on bitcoin for cross-border money transfers to avoid the high costs that come with such transactions, and also because most citizens of El Salvador, i.e. 70 [percent], don’t have bank accounts.“
Ciugu uses billionaire investor Warren Buffet’s previous comments about bitcoin to argue his point that the cryptocurrency is worth zero. Buffet previously stated that the crypto asset had all the hallmarks of a pyramid scheme because it produces nothing. The strategist, like Buffet, believes bitcoin investors have no expectations of making any future profits other than through zero-sum games with other speculators.
The strategist also mentions how bitcoin crashed after Elon Musk expressed his concerns about the crypto asset’s energy consumption. According to Ciugu, such a reaction indicates that BTC is more susceptible to sentiments than actual fundamentals.