Kenneth Rogoff, the former chief economist of the International Monetary Fund, has weighed in on Bitcoin.
"My best guess is that in the long run, the technology will thrive, but that the price of Bitcoin will collapse."
Bitcoin's price has exploded over the last two years, and has climbed more than 350% since the start of 2017.
The cryptocurrency's rapid ascent, and the cottage industry that has grown around it, have galvanized investors' interests and elicited their fair share of criticism.
A number of top Wall Streeters have recently have expressed concerns about Bitcoin. JPMorgan CEO Jamie Dimon called it "a fraud" that is "worse than the tulip bulbs," referring the 17th century Dutch tulip-mania bubble. BlackRock Chairman and CEO Larry Fink, meanwhile, told Bloomberg News that "it just identifies how much money laundering there is being done in the world."
Bitcoin and other digital currencies' transactions are done anonymously. They aren't monitored by central banks like, say, the dollar or the euro. In his piece, Rogoff suggests that if Bitcoin was no longer anonymous and more regulated, then its price might not be sustainable.
"Were Bitcoin stripped of its near-anonymity, it would be hard to justify its current price," he wrote. "Perhaps Bitcoin speculators are betting that there will always be a consortium of rogue states allowing anonymous Bitcoin usage, or even state actors such as North Korea that will exploit it."
He added that central banks could also create their own digital currencies and then use regulation to "tilt the playing field until they win."
"The long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates," he wrote.
Source: BI
Trader-G.Bozhidarov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.