A speechwriter for former U.S. President George W. Bush and a bitcoin critic, David Frum has claimed that the low-interest rates are fueling the crypto assetâ€™s rally. Frum suggests that the crypto asset might experience a â€œfast and deep price crashâ€ if and when interest rates start to rise.
Institutional Interest in BTC
In comments made via Twitter, Frum, who regurgitates the BTC mining inefficiency claims, also attacks the crypto assetâ€™s store of the value proposition. He states that of â€œall the pro-bitcoin arguments, surely the worst is the store against inflation.â€
Still, despite this criticism, the crypto asset continues to gain support from institutional investors and large companies. For instance, electric carmaker Tesla, which recently amended its investment policy, revealed it had bought BTC worth $1.5 billion.
Furthermore, according to bitcointreasuries.org, the website that tracks companies or institutions that have exposure to BTC, over 1.3 million coins or 6% of the total circulating supply is held by large corporations.
The True Value of BTC
In the meantime, Frumâ€™s remarks about bitcoin have sparked a debate on Twitter concerning the crypto assetâ€™s true value proposition. For instance, in his response to the remarks, Alex Gladstein, the chief strategy officer with the Human Rights Foundation (HRF), reminds the former speechwriter about BTCâ€™s human rights implications. Gladstein, who recently endorsed the crypto asset, said:
Also, another user named Unfettered Nic Carter shares with Frum the other likely outcome of rising interest rates. The user explains that â€œif interest rates rise, the corporate sector and the government will be insolvent.â€ Carter then asks: â€œWhat do you think is more likely â€“ we bankrupt everything, or we print our way out?â€
Meanwhile, other Twitter users like Lepton939 said they were in agreement with the assertion that BTC provides â€œimmunity from inflation.â€ Nevertheless, this user expresses concern at the crypto assetâ€™s volatility saying:
â€œSince the price fluctuates so wildly Iâ€™m afraid to hold it. But Iâ€™m guessing its real value is the scale of illicit transactions it accommodates.â€
Still, other users like Jeffrey Smith are praising Frum for making these remarks about bitcoin. In his tweet, Smith remarks:
While Smith suggests that â€œgold is very similarâ€ he is however quick to explain that unlike BTC, the precious metal can be used for making jewelry. He then concludes by saying: â€œThereâ€™s no Bitcoin jewelry as far as I know.â€
Do you agree with Frumâ€™s assertion that BTC value will crash once interest rates start to rise? Tell us what you think in the comments section below.
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