Bitcoin is more likely to be $100 than $100,000 in the next ten years, says Harvard economist
Harvard University professor and economist Kenneth Rogoff said Tuesday that the possibility of bitcoin prices falling to $100 is greater than the digital currency trading at $100,000 in a decade.
“I think bitcoin will be worth a fraction of what it is now if we go ten years from now … I think $100 is more likely than $100,000 ten years from now,” Rogoff told CNBC’s ” Squawk Box .”
“If you take away the possibility of money laundering and tax evasion, its actual use as a means of transaction is minimal,” said the former chief economist of the International Monetary Fund (IMF).
Many illegal transactions are associated with Bitcoin, whose valuations vary with the use of the digital currency used in illegal activities. According to Shone Anstey, co-founder and president of the Blockchain Intelligence Group, he calculated that the level of illegal transactions decreased to 20 percent in 2016 and was “significantly less than that” in 2017.
Regulations introduced by the government will cause bitcoin prices to fall, Rogoff said, although he stressed that it will take time to develop a global regulatory framework.
“It needs to be a global regulation. Even if the US goes along with it and China, but Japan doesn’t, people will still be able to move money through Japan,” he said.
According to industry site CoinDesk, Bitcoin was trading around $11,242.61 during Asian morning trade on Tuesday. The price of the digital currency has fallen this year from a record high of more than $19,000 in December last year.
The authorities have been passive in regulating bitcoin, and the reason for this is the anticipation of the technology behind the digital currency, according to Rogoff.
“They want to see technological advances,” Rogoff said, adding that the private sector has historically “designed everything” in the history of currency, from standardized coinage to paper currency.
Bitcoin is a significant area of growth as an application of blockchain technology that enables transactions to be maintained and recorded.
However, there have also been claims of bitcoin prices falling in the past. Before bitcoin’s selloff last December, Rogoff said last October that valuations of the digital currency would “crash” because of governments’ attempts to regulate the space.