In the heat of the crypto-fall, when bitcoin costs 80% less than a year ago, Harvard University Professor Kenneth Rogoff said the «big daddy» is more likely to be worth $100 rather than $100,000 in the future.
Playing the Lottery With Bitcoin
Kenneth Rogoff, who is a Professor of Economics and Public Policy and the former chief economist of the IMF, in a recent article for authoritative media outlet The Guardian, called bitcoin «a lottery ticket.»
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Most importantly, Rogoff rejected the idea that bitcoin is «digital gold.» Instead, he referred to it as a «nutty» coin. The expert added that bitcoin will not necessarily cost zero, but it is more likely to be traded at $100 than $100,000 in a long-term run.
The economist explained that the use of bitcoin is bounded by transactions only, unlike material gold. For this reason, it is assailable when it comes to bubbles. Moreover, he said that systems which draw on credible central authorities like banks are much more effective than cyber-assets’ verification process, which consumes a lot of energy.
Regulatory Issues
In his view, bitcoin appears to be in an ambiguous situation which can have consequences in its future price.
“Take away near-anonymity and no one will want to use it; keep it and advanced-economy governments will not tolerate it,” said the expert.
For these reasons, the economist argued, regulators in different countries cannot approve the use of transaction tech trend, which is expensive to trace and which can contribute to the criminal activity, money laundering and evasion of taxes.
Rogoff admitted that soon governments all over the globe might regulate a novel asset class — the class of digital assets. Central banks have already stepped on this path, which many crypto-supporters call the path of rivalry. However, the economist added, coordination on the global scale will be about “stamp[ing] out privately constructed systems.”
He also pointed out that it is usually discontented states which turn to cyber-coins due to the pressure of Western sanctions. He named North Korea, Somalia, Iran, Cuba, Russia and Syria among such.
Total Market Cap Predictions
The economist also addressed crypto-fluctuations in the article. He assumed that it is emotions of the crypto-enthusiasts which will drive the total market cap boost within the following five years. As a result, he suggested, the entire market would rise to $5-10 trillion. At the same time, he said that the 80% drop of bitcoin from $20,000 to below $3,400 was not a reason for panicking in the view of the history of BTC’s fluctuations.
