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Bitcoin’s Current Hurdles, Prospects Debated

Two experts debated the long-term prospects of Bitcoin in a Wall Street Journal report and came away with different conclusions. One of the experts sees plenty of upside. She noted that: (1) Many countries with high inflation or unstable fiat currency could see Bitcoin as a stable alternative currency; (2) The launch of Bitcoin futures on the Cboe and CME may reduce long-term volatility and Bitcoin’s price could stabilize in the near future; (3) New technologies could solve Bitcoin’s capacity, security and merchant acceptance problems; and (4) Major countries are seeking to appropriately classify Bitcoin, which would establish a regulatory and legal framework for cryptocurrencies. On the other side of the debate, the other expert pointed out that for the average customer Bitcoin has no real use. He noted Bitcoin’s valuation problems and cast doubt on whether the cryptocurrency can surmount its capacity, security and regulatory challenges. Meanwhile, Fidelity announced that it would launch a new company to buy and sell cryptocurrencies for hedge funds and other institutional clients, Reuters reported.