Mon. Feb 18th, 2019

Harvard Economist – Bitcoin Future Value to be $100 Rather Than $100K

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Dec 17

 

Former chief economist of the International Monetary Fund (IMF) has defined Bitcoin as “a lottery ticket.”

Harvard University Professor of Economics and Public Policy Kenneth Rogoff has suggested that the “overwhelming sentiment” among crypto advocates is that the total “market capitalisation of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”

The historical volatility for the asset class, reaching highs of $20,000 and coming down to $3,500 earlier today is “no reason to panic.”

The economist dismissed “crypto evangelist” views of Bitcoin as Digital Gold, calling this as “nutty,” whilst stating the long term value as “more likely to be $100 than $100,000.” Rogoff argued that unlike physical gold, Bitcoin’s use is limited to transactions – making it purportedly more vulnerable to a bubble-like collapse. Additionally, the cryptocurrency’s energy-intensive verification process is “vastly less efficient” than systems that rely on “a trusted central authority like a central bank.”

Even if Bitcoin should not necessarily be “worth zero,” Rogoff argued that national governments and “regulators are gradually waking up to the fact that they cannot countenance large expensive-to-trace transaction technologies that facilitate tax evasion and criminal activity.”

This places Bitcoin in a Double Bind according to Rogoff: “take away near-anonymity and no one will want to use it; keep it and advanced-economy governments will not tolerate it.”

He further argued that global jurisdictions will want to stamp out privately constructed ecosystems with some exceptions:

The right way to think about cryptocurrency coins is as lottery tickets that pay off in a dystopian future where they are used in rogue and failed states, or perhaps in countries where citizens have already lost all semblance of privacy. It is no coincidence that dysfunctional Venezuela is the first issuer of a state-backed cryptocurrency (the “petro”).”

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