Kenneth Rogoff has reflected the opinion of JP Morgan CEO Jamie Dimon, saying Bitcoin is a bubble that will eventually burst. However, he believes the crypto coin's underlying blockchain technology is here to stay.
Whenever Kenneth Rogoff speaks, people listen. This is because he is an accomplished academic. Currently, he is a professor of public policy and economics at Havard, and he also boasts of degrees from Ivy league schools like MIT and Yale University. In addition to this, he was the Chief Economist at the International Monetary Fund, IMF, from 2001 to 2003.
So, he should know what he's talking about whenever he speaks, and right now he's talking about Bitcoin.
Kenneth is the latest addition to the side of Wall Street that believes Bitcoin will eventually collapse. In this article published in The Guardian, he made his opinion known.
Bitcoin has no future, Blockchain is the future
According to Kenneth, the only good thing about Bitcoin is the blockchain technology it runs on.
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, but maybe after the longest and biggest bull run in human history.
Kenneth didn't speak much about Bitcoin's price, he just expressed a strong belief that Bitcoin will not prosper in the end, no matter what happens.
On the other hand, he extolled the potential of the technology behind Bitcoin, saying the ingenious tech has broad applications in cybersecurity and Fintech.
Governments to crack down on Bitcoin
At the moment, the crypto world is a bit of a free-for-all, with little or no regulation in most parts of the world. This situation will change with time, according to Rogoff.
He acknowledged that some governments have embraced and regulated Bitcoin and other cryptocurrencies but believe they will turn their back and ban cryptocurrencies once it becomes evident that they are being used for criminal activities, to launder money or to evade tax. No government or central bank will allow virtual currencies to disrupt the establishments created by fiat, he said.
"But it is folly to think that bitcoin will ever be allowed to supplant central-bank-issued money. It is one thing for governments to allow small anonymous transactions with virtual currencies; indeed, this would be desirable. But it is an entirely different matter for governments to allow large-scale anonymous payments, which would make it extremely difficult to collect taxes or counter criminal activity."
Government will eventually take over everything
In the conclusion of this article, Kenneth said governments will, in the end, take over the crypto sphere, pointing out that governments always hijack and take over whatever innovations the private sector creates.
"Finally, it is hard to see what would stop central banks from creating their own digital currencies and using regulation to tilt the playing field until they win. 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."