In a ten-year period, the world’s number one digital currency, the Bitcoin, is likely to experience a dramatic decline due to its limited range of uses, according to Harvard University professor and economist Kenneth Rogoff.
“I think bitcoin will be worth a tiny fraction of what it is now if we’re headed out 10 years from now… I would see $100 as being a lot more likely than $100,000 10 years from now,” the economist told CNBC.
Rogoff, the ex-chief economist of the International Monetary Fund (IMF), said the likely drop would be caused by a limited range of uses of digital currencies in general and bitcoin in specific.
“Basically, if you take away the possibility of money laundering and tax evasion, its actual uses as a transaction vehicle are very small,” said Rogoff.
Although cryptocurrences are strongly associated with hidden, often illegal activities, figures reflecting the rate of illicit transactions or other illegal activities vary. According to the president of Blockchain Intelligence Group, Shone Anstey, the level of illegal transactions in bitcoin fell to 20% in 2016 and was “significantly lower than last year’s level.
The number of confirmed daily Bitcoin transactions dropped to its lowest level in two years in spite of record low fees, according to data from the Bitcoin Block Explorer and the Cryptocurrency Blockchain portfolio service. info.
Rogoff says active government regulation of crypto markets will lead to lower prices, although it takes some time for oversight bodies around the world to develop an industry control framework.
It really needs to be global regulation. Even if the US cracks down on it and China cracks down, but Japan doesn’t, people will be able to still launder money through Japan,” the economist said.
Rogoff pointed out that the authorities have not yet launched proper regulation of bitcoins due to the anticipation of blockchain technology, which is the driving force behind the digital currency.
They want to see the technology develop,” he said, adding that the private sector had “invented everything” in the history of currency, from standardized coinage to paper money.
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