Harvard economist and professor Kenneth Rogoff believes Bitcoin is more likely to plummet to the $100 level by 2028 rather than soar to over $100,000.
Rogoff, former chief economist of the International Monetary Fund (IMF), said that Bitcoin is holding its value because of “money laundering and tax evasion”.
“Basically, if you take away the possibility of money laundering and tax evasion, actual uses as a transaction vehicle are very small,” he said.
Increased government regulation would result in a drop in the value of Bitcoin, Rogoff said. However, he added that it will take a while for a global framework of regulation.
“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 added.
At the time of writing (19:16 UTC) Bitcoin is trading at around $10,664, a 6.73% decline from its March 6 opening price of $11,432, according to Coindesk. The cryptocurrency has dropped by over 16% since the beginning of the year and has plunged by almost half since its record high last December.
In a separate interview last October, Rogoff told CNBC that the cryptocurrency would “collapse” as governments increase cryptocurrency regulation.
Rogoff’s comments are in contrast to what many in the crypto community believe will happen to the value of cryptocurrencies under increased regulation.
Adv. Aviya Arika, Head of Blockchain Innovation at Porat & Co. Law Firm, was quoted by Coin Telegraph as saying:
“Contrary to what your instinct may tell you, regulation actually makes cryptocurrencies prices flourish.
“Regulatory uncertainty, as well as outright bans by governments, have proved to be harmful to the crypto markets.
“When an investor/user is not sure about how they are going to be taxed when they sell their crypto, or about the mere legitimacy of their use of crypto, they will most likely steer clear of it altogether or just hodl until further notice. These behaviors lead to a bearish market.
“However, when regulators shed light on the way they view cryptocurrency, investors and users feel more certain regarding the way they can use crypto, whether it be as a medium of exchange, a financial instrument or any other form.
“Generally speaking, I think that as more jurisdictions regulate and clarify legal statuses of cryptocurrencies, crypto markets will become substantially more stable and widely adopted.”
In this context, jurisdiction refers to the regulatory bodies and their powers they have.
Bitcoin is a type of digital currency, i.e., a currency that only exists in electronic form. Bitcoin circulates without a central bank, unlike fiat currencies. Euros, dollars, euros, pounds, yesn, rupees, and yuon are fiat currencies.
Bitcoin is a cryptocurrency. Their creators designed them to be extremely secure. Most cryptocurrencies are also anonymous.
Anonymous means that you can use the digital currency to buy things or send funds without revealing your identity.
Distributed ledger – blockchains
Most cryptocurrencies use distributed ledger technology. In other words, there is no central ledger. All the data regarding every transaction is stored in every block across the network.
Blocks are records, which link to each other to create ever-expanding blockchains.
A block is like a ledger page in accounting, while the blockchain is like the entire ledger book.
It is very difficult, or maybe even impossible, to carry out an effective cyber attack on a blockchain system. For the attack to be successful, you need to hit every single block simultaneously.