Bitcoins dubious future
Harvard economist Kenneth Rogoff is confident that the rise in the value of Bitcoin cannot continue forever. The expert believes that its value will begin to decline over time under pressure from governments of different countries.
This summer, the total value of the cryptocurrency market reached $160 billion, ten times higher than at the beginning of 2017. Now, a leading economics expert is warning investors that cryptocurrency may not become the top financial trend of the future. It may also be a disappointment when one day the value of digital money plummets. According to Kenneth Rogoff, it is very naive to expect that Bitcoin will ever reach the level of money operated by central banks of states.
It's one thing for a government to allow relatively minor, anonymous virtual currency transactions. This is really not bad for the financial system. However, allowing large-scale uncontrolled payments is unacceptable for any government. This move will make it more difficult to collect taxes and fight crime.
Bitcoin became the first cryptocurrency and is still the most popular. However, over the past few years, many competitors have appeared, which has complicated the existence of the digital money market. New “coins” and “tokens” are mined faster and have powerful PR. Rogoff believes that one day the miners will overdo it and the market will collapse. The economist also notes that governments can intervene in the market at any time if they feel it is changing too quickly. And all this to monitor transactions and prevent malicious tax evaders or insidious schemers from running wild.
Rogoff gives the example of Japan. Bitcoin is already very popular in Asia and, obviously, its popularity will continue to grow due to very lenient regulation. However, if Japan decides to reconsider its previous decision and become more focused on cryptocurrency, or if banks succeed in creating an alternative cryptocurrency, the value of Bitcoins will drop significantly.
The Harvard expert does not say when exactly the cryptocurrency is expected to collapse. This means that his words are more of a forecast of the distant future. In the end, there are many of his colleagues who look at this more optimistically. Thus, Roni Moas from Standpoint Research believes that within the next three years one bitcoin could cost as much as 20 thousand dollars.
As for the influence of governments, economists from the Central Bank of Finland believe that blockchain technology quietly ensures self-regulation of the cryptocurrency market, so governments will not be able to do anything, even if they really want to.
