Bitcoin’s future is undoubtedly tough to predict. The pundits either believe it will go to the moon or collapse. The latest to join the league of those predicting the demise of Bitcoin is Kenneth Rogoff, a professor of economics at Harvard University.
Who is Kenneth Rogoff?
Ken Rogoff is a professor of public policy and economics at Harvard University. He has a distinguished academic background, with degrees from Yale University and MIT. He served as the chief economist of the IMF from 2001 to 2003 and is a chess grandmaster. With such a background, it is inevitable that his views on Bitcoin attract a lot of attention.
Dim Views on Bitcoin
In a blog post in the Guardian, Ken Rogoff writes:
“Is the cryptocurrency Bitcoin the biggest bubble in the world today, or a great investment bet on the cutting edge of new-age financial technology? My best guess is that in the long run, the technology will thrive, but that the price of Bitcoin will collapse.”
While he acknowledges that certain governments like Japan have taken the lead in regulating and accepting virtual currencies, he attributes it to a desire to become the global leader of fintech. He expects most governments to ignore Bitcoin when used for small, anonymous transactions; but act against it once Bitcoin becomes more widely used.
“The long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates. I have no idea where Bitcoin’s price will go over the next couple years, but there is no reason to expect virtual currency to avoid a similar fate.”
Echoes Jamie Dimon’s Arguments
Ken Rogoff’s arguments for Bitcoin’s eventual collapse seem to echo Jamie Dimon’s views – that governments will not allow Bitcoin to become successful and will coerce Bitcoin users into abandoning it. When asked about the government’s ability to shut down a currency which is virtual and knows no boundaries, Jamie had even added that governments could threaten Bitcoin users with jail. It is interesting to note that all the prophesies about Bitcoin’s demise come from people within the establishment, whose very future Bitcoin threatens.
The professor has predicted that Bitcoin will eventually collapse, but has given no time frame for this to occur. Hence it is impossible for him to be proven wrong, even if each Bitcoin becomes worth a million dollars, as it might still eventually collapse. Analysts who work in the real world (as opposed to theoreticians) have to make time-bound predictions. There is a lot of difference between an asset’s price doubling in two years and doubling in twenty years.
Remember Professor Bitcorn?
Comparisons with predictions made by another professor, Mark Williams, will be inevitable. Mark William was dubbed “Professor Bitcorn” after he bravely predicted in December 2013 that Bitcoins would be worth less than $10 by mid-2014. When Bitcoin remained at over $600 in June 2014, he remained defiant and stated that time would vindicate his prediction. By refusing to specify a time frame for his projection, Ken Rogoff has at least avoided Mark Williams’ fate.
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