On Friday, Michael Saylor came out in support of Bitcoin (Cryptocurrency: BTC), even as former British Prime Minister Boris Johnson labeled it a “giant Ponzi scheme” in his column.
Boris Johnson questions Bitcoin’s value
In his commentary, Johnson claimed that digital currencies like Bitcoin depend largely on people’s belief in them rather than any intrinsic value.
He likened cryptocurrencies to Ponzi schemes, saying their worth hinges on a continual influx of new investors willing to buy in.
“I’ve always been skeptical that all cryptocurrencies are essentially Ponzi schemes,” Johnson stated, emphasizing that these structures necessitate a “constant supply of new and gullible investors.”
Former PM shares Bitcoin investment story
To highlight his worries, Johnson recounted a tale of a villager who invested around 500 pounds (about $660) in Bitcoin after being promised a doubling of his funds by a pub acquaintance.
Ultimately, the investor lost close to 20,000 pounds (about $26,000) after attempting to recover his money through various fees.
According to Johnson, stories like this serve to underscore the dangers for individuals, particularly older investors, who may not fully grasp the mechanics of cryptocurrency markets.
He also questioned Bitcoin’s fundamental value, pointing out that unlike gold or collectibles, cryptocurrencies are merely digital codes existing on computers.
Johnson noted that traditional currencies have historically benefitted from the trust vested in them by governments and institutions.
Michael Saylor contests ‘pyramid scheme’ designation
Saylor, on the other hand, defended Bitcoin, stating, “Bitcoin is not a pyramid scheme.” He explained that in a Ponzi scheme, a central operator guarantees returns and pays early investors from the investments of later participants.
Saylor added that Bitcoin “has no issuer, no promoter, and no guarantee of return. It is simply an open, decentralized monetary network driven by code and market demand.”
As of the time of this discussion, Bitcoin was trading at $70,647.42, showing a decrease of 1.13% over the past 24 hours, and had a market capitalization of $1.41 trillion alongside a trading volume of $55.35 billion.
