HomeNewsTendayi Kapfidze : "Bitcoin is a Pyramid Scheme Without Real-world Utility"

Tendayi Kapfidze : “Bitcoin is a Pyramid Scheme Without Real-world Utility”

The opinions on bitcoin often differ from person to person. Not everyone sees this project succeed, which is understandable. Calling it an outright pyramid scheme, like Tendayi Kapfidze, is something else entirely, however. 

Bitcoin Remains a Rollercoaster

Anyone can look at the bitcoin price charts and see where the skepticism stems from. Whereas all financial markets are volatile, bitcoin takes this to a whole new level. Its value can fluctuate by 10% or more on a regular basis, which makes for a very risky investment.

Despite this volatile nature, bitcoin is a powerful asset. It is the best performer for the previous decade. Moreover, it tends to note  a higher yearly low every single year. That confirms the overall uptrend remains firmly in place. Unfortunately, it appears that one economist is convinced this is a clear sign of a pyramid scheme.

Tendayi Kapfidze is a “Hater”

It is not uncommon for economists to be outspokenly negative regarding bitcoin. In fact, most top economists dismiss cryptocurrency altogether. Lending Tree Chief Economist Tendayi Kapfidze falls into this category as well. He proclaims how bitcoin is a pyramid scheme and should be avoided.

Users will only make money off of the people who buy bitcoin after them.  Additionally, Kapfidze claims bitcoin has no real-world utility. It is true that spending BTC is not as straightforward. However, various solutions exist to make this process more straightforward. 

The opinion by Tendayi Kapfidze is not unique. However, it is also a bit dubious. Based on his first statement, all investment markets are pyramid schemes. Investors benefit from others buying the same investment vehicles that they do. This applies to any and all markets, and isn’t unique to bitcoin. 

The real-world utility of cryptocurrencies is a complex subject. It is a very different form of money or investment altogether. Bitcoin doesn’t abide by traditional rules or environments. As such, finding its real-world meaning requires out-of-the-box thinking. 

Banks Warm up to Cryptocurrency

Having an economist call bitcoin a pyramid scheme is not surprising. The timing for this statement, however, seems a bit off. In recent months, banks around the world have shown an interest in cryptocurrency. More specifically, most institutions want to provide custodial bitcoin services.

For Tendayi Kapfidze, making this nonsensical statement couldn’t have been timed worse.  When the financial sector proves economists wrong, an interesting situation is created. 

No one knows what the rest of this decade will bring. Bitcoin may surprise or disappoint everyone. The same can be said for traditional finance and investments. 

JP Buntinx
JP Buntinx
JP Buntinx is passionate about cryptocurrencies, fintech, blockchain, and finance. He currently resides in Belgium.


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