An economics noble prize winner is the latest to launch an attack on Bitcoin despite its progress among the various cryptocurrencies. Bitcoin’s price has soared above $10,000 making its investors laugh at the other side. Its track record has made several countries regulated it whiles other countries are still putting measures in place to legalize it.
Laureate Joseph Stiglitz, a noble prize winner criticized the virtual currency and called on authorities to ban it. This has been the stand of several critics of bitcoin, and whether their opinion will be honored or not, is a different story to tell.
Laureate Joseph Stiglitz Assessment on Bitcoin
In an interview with reporters, laureate Joseph Stiglitz said that the success of Bitcoin is only attributed to its potential for circumvention. “Bitcoin is successful only because of its potential for circumvention. It doesn’t serve any socially useful function.” This is very harsh and hard argument on the Bitcoin lovers.
Bitcoin has had a lot of critics right from its very beginning to its current state, however, those who had faith in it are rising with it to the top. Jamie Dimon recently called Bitcoin as “fraud” for reasons only known to him. Despite the many opposes, Bitcoin investors pride themselves on the fact that Bill Gate is a fan of Bitcoin. The Abu Dhabi Sovereign Fund Chief opposed Dimons assertion and said “only time will tell if Bitcoin is a fraud or not”
Bitcoin broke the heart of all doubters to reach $11,000, recording 1000% of price increase since January. Another Noble prize winner, Robert Shiller told reporters that Bitcoin’s wide acceptability is due to the fact that it is anti-government and anti-regulation.
Stiglitz shared an opinion which seems to be a common view among all the critics that Bitcoin will rise and crumple down to leave investors in regret. “Going to give a lot of people a lot of exciting times as it rides up and then goes down,” he said.
He believes that government regulations will largely affect Bitcoin and eventually shut it down. Some reporters were swift to agree with him as Bitcoin showed a 20% decrease right after his prediction. However, this does not vindicate Stiglitz but instead reveals the nature of Bitcoin.
Bitcoin, after hitting $2000 decreased swiftly to $1900 but took a reverse super exceeding $2000 to $3000. When Bitcoin reduces temporary, it is likely that it will take a big rise as this has been a hallmark of the currency.
Predictions for Bitcoin (In Contradiction to Stiglitz View)
Despite the fact that Bitcoin has been predicted to crumple down in the coming years, other experts have predicted Bitcoin to survive and rise even further. Some experts have even predicted Bitcoin to reach $1 million in few years ahead.
James Altucher has predicted that Bitcoin will rise to $50,000 under a condition that the currency of Argentina and Venezuela will fail. He said that it will encourage the adoption of Bitcoin which will go a long way to raise the Price. In fact, Altucher predicted that Bitcoin will reach $1000,000.
He believes that the demand for Bitcoin exceeds the supply which will move the price up. “There’s $200 billion in cryptocurrencies out there and over $200 trillion in demand for money — that’s the amount of paper currency and gold bullion in the world,” he said.
This is a direct contradiction of Stiglitz view even though he admitted that Bitcoin will rise for a while and crumple down.
Bitcoin Will Not Be Banned, but Will Be Legalized
Despite the call on various governments to ban Bitcoin, countries are rather considering its legalization as it comes with a lot of economic benefits. Belarus and Iran recently announced to consider the use of Bitcoin to join the tall list of Bitcoin enthusiastic countries.
Malaysia recently reported regulating Bitcoin use which is likely to bring millions of users to the market. This will raise the demand and eventually push the price higher.
Some critics don’t believe in the currency because they think it increases illegal activities. This is not always true with perfect regulations. Malaysia looks forward to coming out with guidelines that will offset the weakness of the currency.
“We hope that by year-end, BNM will be able to come out with some guidelines on cryptocurrency, particularly those related to anti-money laundering and terrorist financing. We want to ensure that there are clear guidelines for those who want to participate in this sector,” said Muhammad bin Ibrahim, Bank Negara Malaysia.