The former IMF economist Kenneth Rogoff is certain: “The Bitcoin market is a bubble and will collapse, but other crypto currencies would thrive and determine the future of finance. This is the quintessence of an editorial by Harvard professor published this week in the British Guardian. This adds another name to the list of prominent Bitcoin skeptics.
Are crypto currencies the undisputed future of digital finance, or are they just the next tulip in the face of dizzying exchange rates?
The former chief economist of the International Monetary Fund (IMF) Kenneth Rogoff answered this question this week with a disgruntled forecast. His look into the future predicts: “The Bitcoin rate is a bubble that will collapse. However, this is not a rejection of crypto currencies per se, rather the technology would “flourish for a long time”, Rogoff confirms the view of the current IMF director Christine Lagarde.
The ongoing price sprint would come to an end and Bitcoin news itself would be replaced as the currency
After JPMorgan Chase CEO Jamie Dimon had already sent the Bitcoin news exchange rate on a downward trend with his accusation of fraud in September, another well-known voice from the economy is now painting a gloomy picture of the future for the quasi-leading currency.
Rogoff sees the pessimistic prospects for Bitcoin as simply justified: Governments could not and would not allow the currencies of decentralised providers to determine the future of finance without public control and at the same time catalyse tax fraud and money laundering. Sooner or later Bitcoin will be the fate of all currencies, Rogoff says. And this is the subordination of state authority.
In Rogoff’s view, this is the end of Bitcoin’s attractiveness: “In the long term, upcoming regulatory efforts would deter investors from speculative interest and dampen the market. He analyses: If the almost anonymity and liberation of state control is omitted, this also applies to the justification of ever new price peaks.
Regulation discourages investors
He continues to see this in the already existing density of alternative coins and the possible development of new crypto currencies regulated by central banks, which would deprive Bitcoin of its right to exist and its unique position. An end of the exchange rate highs can thus be foreseen.
While regulatory responses from the state, for example from Russia, are already emerging and are thus heralding such comprehensive government control, other countries are aiming to exploit Bitcoin’s potential. The 64-year-old takes a critical view of this. Rogoff sees Japan’s moves to recognise Bitcoin as an official currency as a threat to possible tax havens and safe havens for crime financing.
Meanwhile, trade in Bitcoin is booming and has recovered strongly since the share price fell sharply in September due to Jamie Dimon’s comments and China’s increased regulation. On Monday, 10 October 2017, the exchange rate reached a high for the month of 4,638.07 US dollars. This means that the currency has risen by 365 % since the beginning of the year.