What is one of the problems with Bitcoin and other cryptocurrencies?

• A. They are backed by a central bank
• B. They have stable value
• C. They are illegal tender
• D. They have no inherent value and their value is volatile

Answer: (D)

One fundamental issue with Bitcoin and other cryptocurrencies is that they have no inherent value and their price is highly volatile. They aren’t backed by a government or by any physical asset, so what value they have comes entirely from what people are willing to pay and how confident they are in the system. This makes their value swing dramatically with speculation, regulatory news, or shifts in sentiment, rather than being tied to tangible goods or guarantees. That volatility makes it hard to use as a stable medium of exchange or a reliable store of value in real estate transactions, where large sums and financing rely on predictable pricing and contracts. They aren’t typically backed by a central bank, and while there are regulatory restrictions in some places, they aren’t universally illegal tender.