When discussing Bitcoin (BTC), Wall Street analysts often fall into two camps: they either predict extraordinary adoption and soaring valuations or completely dismiss its value.
Gordon Johnson of GJL Research, known for his bearish views on Tesla (NASDAQ: TSLA), recently shared his perspective on Twitter. He responded to queries about the decline in Bitcoin’s value while Gold was experiencing a surge.
In essence, Johnson argues that BTC and other digital currencies hold ‘ZERO value’ and presented four main reasons for this assertion.
His remarks were spurred by recent fluctuations in the crypto and commodity markets. On January 18, Bitcoin plummeted from around $95,000 to approximately $89,000, while gold surged from about $4,550 to close to $4,860.
Bitcoin is Worthless Due to Its Uselessness
Johnson contends that the primary reason Bitcoin lacks value is the absence of a clear application for its technology. He noted that much of the cryptocurrency use is now focused on online gambling or speculative trading via platforms like Polymarket.
While this perspective may seem odd to blockchain advocates, it’s a sentiment shared by many who believe that digital assets often offer costlier alternatives to existing digital solutions. Nevertheless, many technology experts recognize potential applications for blockchain in issues like digital identity and supply chain management.
Bitcoin Lacks Value as It Can’t Function as Real Currency
Johnson further claims that Bitcoin’s fixed supply disqualifies it as a genuine currency, arguing that this is why it holds no value. Historically, the minting of more currency has been a common practice in economics, well before and after the Gold Standard was established.
The CLARITY Act and Its Implications for Cryptocurrencies
Johnson also argues that all cryptocurrencies should be classified as unregistered securities. Despite significant victories in the digital asset space, such as Ripple Labs winning a case against the SEC, uncertainty remains. Recent discussions around the CLARITY Act indicate that new digital projects may automatically be classified as securities.
Cryptocurrencies are Doomed Due to Historical Failures of Private Money
Johnson concludes with the assertion that private currencies have consistently failed throughout history. Various attempts to create alternative currencies often resulted in instability and fraud, typically rectified by national authorities introducing their own currencies.
Johnson’s View on Gold’s Value and Its Price Increase
Johnson’s basic argument for gold’s enduring value is that it has held intrinsic worth throughout recorded history, regardless of economic changes. As he succinctly put it: “Gold doesn’t need a narrative; it has always been valuable.” This perspective resonates with both proponents and detractors of gold, noting its enduring allure due to its shiny appearance and historical scarcity.
Featured image via Shutterstock
