THE CEO of a leading investment company has admitted that bitcoin made a crucial mistake in its development that could allow other cryptocurrencies to pass it by, as he explained the reasons behind the currency's volatility.
Jim McCaughan, CEO of Principal Global Investors, said that bitcoin's volatility would never cease because the cryptocurrency had no fundamental value.
Bitcoin has enjoyed a sky-rocketing boom in market value over the past year, but recently has suffered a series of volatile price changes in the market.
bitcoinGETTY; BUSINESS INSIDER
McCaughan, CEO of Principal Global Investors, said that bitcoin's volatility would never cease
Mr McCaughan said that bitcoin will ultimately lose because the current leading cryptocurrency does not have a real coin to back it up.
He said that it is too late now for bitcoin to develop a medium of exchange, due to the financial instruments and investments made into it.
However, the CEO suggested that other cryptocurrencies could eventually surpass bitcoin if they developed their own real medium of exchange.
He also dismissed any prospect of bitcoin replacing gold for the same reason.
He told Business Insider: "Things will come through over the next few years. Cryptocurrency is a big enough phenomenon to be quite important.
"With bitcoin, there is no fundamental value so it could just as easily double as it could go to zero.
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