Ever since the tremendous price increases, naysayers and Bitcoin critics have been everywhere, trying to cast doom in the unprecedented demand. Just a few days after JP Morgan boss Jamie Dimon termed the recent upsurge in Bitcoin prices ”a fraud that will ultimately blow up,” many may have started to develop cold feet towards cryptocurrencies. But it seems their sentiments coupled with China banning Bitcoins altogether did nothing to quell the rapid skyrocketing in prices.

Bitcoin is the first unmonitored peer to peer payment network that knows no middlemen or central authority. The system is merely a decade or two old, but the shockwaves it has created are far much more than “unlawful, stupid and dangerous” as said by the boss of America’s biggest bank. The recent occurrences seemingly go against the many doom predictions advanced by the many “crypto-skeptics” ever since the upward trajectory started.

However, up to this point, the big question is when these mysterious valuables will be eliminated and how it will happen. The whole system has too many unanswered questions, including how cryptocurrencies aren’t immune from such perils as fraud and speculation. And unless all the fears are solved adequately, maybe Bitcoins will remain a time-bomb and blow out due to the following reasons.

Dilemma surrounding valuation

Look at: The different ways the Blockchain can be used

Perhaps the greatest controversy surrounding the whole craze is how to value these digital currencies. Stocks, bonds, and currencies have a definite way of valuation, frequently based on a couple of factors. Past and future earnings, sales, and dividends do affect the price of stocks, while currencies are judged based on how others are faring on. Bonds are valued based on if the issuer will pay back investors.

But Bitcoins are still a mystery with no benchmark of valuation whatsoever. They aren’t listed on any stock exchange, and earnings are shrouded in controversy. What even puzzles the most is how the system is – no regulator and thus no earnings-price ratio.

Even though the many linked computers and crypto-enthusiasts are dotted all over the planet and maintain their own vibrant market, the absence of necessary measures means Bitcoins won’t last. There can’t be a legitimate market without clear price discovery and transparency in valuation. As such, bidding will eventually hit a dead end, and that will mark the end of Bitcoins.

Increase in Fraud and Illegal Activities

Because all transactions are encrypted, it is an open secret that Bitcoins are majorly meant for the dark web as well as when conducting illegal transactions. The entire operations are against the vested interest in the old money system.
In physical banking, all transactions are monitored and regulated, and that’s why the industry has never fallen. Virtual currency can be manipulated, and it may alter how banking and other transactions are conducted, which may adversely affect banks. And that’s why JP Morgan boss Jamie Dimon was just an embodiment of why traditional banking institutions are against cryptocurrencies.

 On Price, Is The Sky The Limit? Maybe Not!

If it wasn’t for the Chinese officials, Bitcoins could have even surpassed the elusive $5,000 mark right now. But up to now, it isn’t hard to find a Bitcoin pundit who is bold enough to predict the price to hit $25,000 mark in the future. Of course, all enthusiasts are hoping and praying for the best, oblivious to the inescapable and unexpected bubble somewhere in the future.

 Is It The Next Global Currency?

Check out: Evolution of currency: how we got to cryptocurrencies

Before the vehement voices against Bitcoins got vocal, perhaps everyone was of the opinion that these digital currencies indeed belong to the future. But what has happened over the past few months might have altered the scale. Today, depending on your point of view, you may support or oppose this assertion.

Sure, the world needs a global currency – a universal coin that is acceptable in all parts of the world. Bitcoins have that potential, but not until rules are laid down regarding valuation and rules of trading. And since virtual currencies seemingly have no face, such a meeting might as well be a mirage. In short, Bitcoins might bubble sooner or later!