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The Federal Reserve has accused the Altcoins in reducing the price of bitcoins

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The Federal Reserve Bank of St. Louis published an article about bitcoin, in which he noted that the price of “cryptocurrency gold” has three options for the development in the future:

  • the strongest growth
  • values ​​are close to zero
  • mean values.

And according to the Fed forecast, the most likely is the third situation.

The authors of the article, David Andolfatto and Andrew Spivak, come to the conclusion that one of the main factors that reduce the price of Bitcoin is the ever-growing supply of alternative cryptocurrencies. Bitcoin, in turn, is a speculative and very volatile asset and constant mining does not mean a constantly increasing cost. If Bitcoin were the only cryptocurrency, which was a very short time in history, all capitalization would go into it. There are other complicating factors that influence the price of Bitcoin. This forecast is based on the opinion that Bitcoin has no fundamental value and that the market will recognize this fact sooner or later.

In our opinion, although its fundamental value is not equal to zero, we must admit that Bitcoin is trading above its fundamental value. In fact, many securities, and even gold, trade above their nominal value.

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