Speaking to Fox Business, Kelly suggested that Bitcoin losing about 20% in a single day is enough reason not to declare it a legal tender. He made the remarks after El Salvador officially adopted Bitcoin as a legal tender on Wednesday with the asset reacting by losing value with an almost $300 billion wipeout from its market cap. Kelly compared Bitcoin’s volatility to the Mexican peso crisis that suffered a fall devaluation of about 13% in 1994.
‘Bitcoin’s legitimacy debunked’
According to Kelly, Bitcoin alleged legitimacy has been debunked over time. He notes that Bitcoin has not proven itself as a store of value to replace gold due to its volatile historical nature. Interestingly, several Bitcoin proponents believe that with the growth of cryptocurrencies and institutions’ entry, the asset is in line to replace gold as the ultimate store of value. Kelly added that the recent volatility should not come as a surprise with reference to Bitcoin’s 2017 rally that saw the asset hit a high of $20,000 but later plunged to $3,000. He maintained that Bitcoin has no chance of being a currency because it lacks solid backing. Following the Wednesday flash correction, Bitcoin gained ground trading at $47,200 by press time with gains of almost 2% in the last 24 hours. [coinbase]
