Jurrien Timmer, director of macro markets at Fidelity Investments, believes that the legalization of bitcoin in El Salvador is given too much importance.
El Salvador passed legislation this week giving bitcoin legal tender status. This move by the El Salvadorian government has generated a lot of positive feedback in the cryptocurrency community. However, Fidelity expert Jurrien Timmer believes that the importance of this event is slightly exaggerated.
In an interview with CNBC Timmer
explainedthat, even having legalized bitcoin, El Salvador did not abandon the US dollar. People will continue to pay and accept payments in this currency, and they can use Bitcoin on a voluntary basis. However, local businesses and organizations should be prepared to accept Bitcoin as payment if customers so desire.
Timmer added that Bitcoin is being tested for the first time as a medium of exchange and not as a store of value. The expert named the key advantages of the first cryptocurrency: a limited supply of 21 million coins and a powerful Bitcoin network. However, due to the use of the Proof-of-Work (PoW) consensus method, Bitcoin is becoming less scalable compared to other Proof-of-Stake (PoS) cryptocurrencies, Timmer added. He compared the current state of bitcoin to a teenager’s age, as it did with gold more than half a century ago.
“In the 1970s, gold went from being money to being an asset. With bitcoin, the opposite is true. It is trying to transform itself from an asset into a currency, becoming ordinary money, ”Timmer said.
Timmer said this spring that bitcoin is beginning to mature as an investment vehicle and should be viewed as an alternative to stocks and bonds.