Government fiat currencies have fundamental value because their taxes are denominated in their fiat currency, while their fiat currency is used to compensate the public sector for their labor. If you, as a private citizen, want to avoid the consequences of not paying your taxes (e.g. prison), you best find a way to get your hands on some of the fiat currency that has entered the economy via the public sector workers.
For a cryptocoin to have fundamental value, someone must be willing to accept it as payment. The only entities willing to do so currently are criminal enterprises and perhaps the El Salvadoran government (to pay taxes). All the other uses (like cross-border payments) rely on speculators on both ends providing liquidity for the exchange to fiat currency.
For a cryptocoin to have fundamental value, someone must be willing to accept it as payment. The only entities willing to do so currently are criminal enterprises and perhaps the El Salvadoran government (to pay taxes). All the other uses (like cross-border payments) rely on speculators on both ends providing liquidity for the exchange to fiat currency.