Allianz Global says Bitcoin is worth nothing, but is bullish on blockchain

<figcaption class="image-caption">It&#39s a bubble -- now, where are we heard that before?</figcaption>

Bitcoin's value is zero, there is however potential in blockchain as technology, states a current note from Allianz Global Investors (AGI), an investment arm of insurance provider Allianz.&nbsp

A dark tone from the note doesn't differ considerably from similar sentiments expressed by prominent investors like Charles Munger and Robert Shiller, but AGI &mdash a business that manages nearly 500 billion euros ($619 billion) price of assets by 12 ,. 2017 &mdash has expanded around the usual bubble talk just a little.&nbsp

"What's the fair worth of a bitcoin? In our opinion, its intrinsic value should be zero: a bitcoin is really a claim on nobody &mdash as opposed to, for example, sovereign bonds, equities or paper money &mdash and it doesn't generate any earnings stream," states the note, signed by AGI Mind of worldwide Financial aspects and Strategy Stefan Hofrichter.

Hofrichter also argues that Bitcoin "ticks all of the boxes" for essential criteria of the bubble: it isn't controlled, it's ripe with fraud, and it is overtraded and overvalued, among other signals. "It seems to all of us that bitcoin mania is really a textbook-like bubble &mdash and one that's most likely nearly to burst," he states.&nbsp

Finally, Hofrichter also argues that Bitcoin isn't any good like a currency either, because of very high cost transactions and cost volatility. And on the top of that, it's horribly energy-inefficient.&nbsp

It's notable the note does not consider any possible enhancements in relation to these issues &mdash technologies that try to solve Bitcoin's transaction fees and high energy consumption are presently being developed, for instance. Additionally, it brushes off gold comparisons having a non-argument, claiming that "gold continues to be broadly recognized by humankind like a factor of worth in excess of two-and-a-half 1000 years &ndash when compared with under ten years for bitcoin."

The note isn't entirely negative towards cryptocurrencies. First, it claims the hype about bitcoin is "most likely" not over yet, as "speculation in bitcoin and other alike instruments seems set to carry on for a while."&nbsp

Additionally, it notes that blockchain &mdash the cryptographically guaranteed, distributed ledger of records that's the underlying technology of Bitcoin &mdash has its own benefits, as it can certainly "reduce considerably the expense of verifying transactions as well as networking."

The cost of Bitcoin reaches $8,711 during the time of writing, lower 4.53 % within the last 24 hrs based on CoinMarketCap.

Disclosure: The writer of the text owns, or has lately owned, numerous cryptocurrencies, including BTC and ETH.

Find out more: https://mashable.com/2018/03/14/allianz-says-bitcoin-worth-nothing/

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