A well-known economist has predicted a steep drop in the price of bitcoin over the long-term.
Kenneth Rogoff, a Harvard professor and former chief economist at the International Monetary Fund, said on CNBC’s Squawk Box program on Tuesday that he expects a fall to as low as $100 over the net decade.
Rogoff remarked on the show:
“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 ten years from now.”
Rogoff struck a critical tone about bitcoin’s use as a means of payment, arguing that there aren’t many uses for bitcoin payments beyond tax evasion and money laundering. Indeed, the former IMF economist has put forward what could be called an ultra-bearish stance on bitcoin prices in the past. Last October, he wrote an op-ed for The Guardian arguing the price of bitcoin will collapse even if the underlying technology thrives.
In part, he based this theory on the idea that governments would not allow decentralized or anonymous cryptocurrencies to completely replace state-issued tender.
Other researchers, looking at bitcoin’s value proposition through the payments angle, have reached other conclusions in the past. Digital Asset Research estimated that bitcoin transaction use cases in 2017 would have established roughly a $2,074 value – even without speculative trading or any store of value market.
And on the illicit activity front, a study by the British blockchain analytics firm Elliptic found only 0.61 percent of the money involved in European bitcoin exchanges and conversion services were verifiably connected to such uses.
Although Rogoff may not be the biggest fan of bitcoin, he still advocated during Tuesday’s interview for a global regulatory response rather than outright bans.
“It really needs to be global regulation. Even if the U.S. cracks down on it and China cracks down, but Japan doesn’t, people will be able to still launder money through Japan,” he said.
Japan is a unique example to cite, considering the nation boasts perhaps one of the world’s most mature regulatory frameworks to date. Japanese regulators said in February that they plan to ramp up on-site exchange inspections – a notable position to take considering that the National Police Agency reportedly identified 669 cases of suspected money laundering from exchange platforms between April and December 2017.