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Tim Draper: I expect people to run to bitcoin the way they do to gold
With the crash of China's stock market, global equity markets went into a tizzy. The Dow Jones industrial average fell over 1000 points, earlier this week. Rising concerns over China's economy has fueled further market volatility.
In times like these, investors generally move towards safe-haven currencies or precious metals such as gold. However, Tim Draper, a founding partner of prominent Silicon Valley venture capital fund Draper Fisher Jurvetson, opines that in times of such market turmoil, bitcoin could emerge as a safe-haven store of value for investors.
"When bitcoin is mature, I expect people to run to bitcoin the way they do to gold when the market gets scary," Draper said in an email to Bitcoin Magazine. "Currently, there is not enough usage to make people feel comfortable investing in Bitcoin when they come out of the market. I expect that to change."
He further suggested that at present, bitcoin is far too speculative an investment for it to be a store of value.
In order to be considered as a store of value, the bitcoin price would need to start rising and stay relatively consistent, rather than having significant volatility. Draper explained that the bitcoin ecosystem isn't in a place, yet, for this to happen.
"There will be pressure on Bitcoin pricing as there is supply to sell as miners get more bitcoin, and less demand to buy as the use cases evolve," Draper further explained to the magazine. "I expect this phenomenon to turn around in about 6 months as use cases become apparent".
(This story was originally covered by Bitcoin Magazine)