Mwotia Ciugu is a Kenyan communications strategist who has warned African investors not to invest in bitcoin, which he claims is worth nothing.

Bitcoin is structurally incapable of fulfilling its promise

In an op-ed published by The Elephant, Ciugu insists bitcoin (BTC) is structurally incapable of delivering on its promise of becoming an alternative store of value or a hedge against inflation. The strategist claims that bitcoin is not a currency or an investment.

Although he concedes that Africa has one of the highest cryptocurrency adoption rates, Ciugu cautions, however, that the top cryptocurrency’s volatility and scalability issues mean it cannot act as a currency. Ciugu is quoted as explaining:

Bitcoin fails as a currency because of two things: volatility and scalability concerns. In its 12 years of existence, bitcoin has maintained extremely high levels of volatility i.e. 60 per cent to 100 per cent annualized.

To further support this point, Ciugu makes reference to the U.S. dollar which he claims “has an annualized volatility of 17 [percent].” Concerning the crypto asset’s scalability problems, Ciugu predictably regurgitates the common arguments about bitcoin’s inefficient use of electricity and how this disqualifies it as a currency for day-to-day transactions.

Bitcoin Useful for Cross Border Remittances

Meanwhile, the strategist denies that bitcoin is now being used extensively in El Salvador, the first country in the world to declare bitcoin legal tender. Ciugu says that the U.S. Dollar is still El Salvador’s dominant currency. These arguments aside, Ciugu surprised to admit that bitcoin sending of remittances is cheaper than regular channels. He explained:

The use of bitcoin in that country is primarily for remittances by citizens working abroad to their families back home. To avoid high fees associated with these transactions and because many El Salvador citizens, i.e. 70 [percent], don’t have bank accounts.

On why he thinks the cryptocurrency is worth zero, Ciugu uses billionaire investor Warren Buffet’s past comments about bitcoin to argue his point. Buffet previously stated that the crypto asset was a pyramid scheme as it does not produce anything. The strategist believes that bitcoin investors, like Buffet, have no expectation of future earnings other than through zero-sum games played with other speculators.

The strategist also makes reference to how bitcoin crashed when Elon Musk voiced his concerns about the crypto asset’s energy use. According to Ciugu, such a reaction means that bitcoin is more vulnerable to sentiments than to actual fundamentals.

The strategist ends this long article by conceding that bitcoin will probably hit the US$100,000 mark in the near future as some analysts are predicting. Ciugu claims that bitcoin’s achievement of this milestone will not affect the “intractable truths” that he has outlined.

Do you agree with Ciugu’s views? Let us know what you think by commenting below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. This article is not intended to be a solicitation or offer to buy or sell any products or services. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The author and the company are not responsible for any loss or damage resulting from or in connection to the content, goods, or services in this article.

Read More