Think bitcoin will just keep on storming higher over the next decade, to hit six figures? Think again, says economist Kenneth Rogoff.
“I think bitcoin will be worth a tiny fraction of what it is now, if we’re headed out 10 years from now … I would see $100 as being a lot more likely than $100,000,” said Rogoff, a Harvard University professor and former chief economist at the International Monetary Fund.
Speaking in an interview with CNBC on Tuesday, Rogoff said that outside of money laundering and tax evasion, bitcoin’s “actual uses as a transaction vehicle are very small.”
Rogoff has spoken out about the cryptocurrency in the past. Last year, in the midst of a strong rally for bitcoin last year, the Harvard economist described the situation as “Enron in the making.”
He’s not alone in his bearishness about bitcoin. Major Wall Street institutions such as Morgan Stanley have showed skepticism about cryptocurrencies, and Joe Davis, Vanguard’s global chief economist and the head of its investment strategy group, said in a blogpost: “I see a decent probability that its price goes to zero.”.
Since reaching highs in December, the leading cryptocurrencies have lost as much as 50%. Bitcoin took only six weeks to
slide from its peak of $19,694.68 to land below $6,000. On Tuesday, it was trading lower at $11,266.04, according to CoinDesk, as it struggles to break through the $12,000 level.
In the CNBC interview, Rogoff said bitcoin needs global regulation, and its use as a vehicle for money laundering won’t be stopped solely by action from U.S. or China officials.
News of regulatory crackdowns has weighed on cryptocurrencies in the past, such as in February, when talk of tighter moves out of India helped drag bitcoin below $8,000.
Last week, news of a possible probe by the U.S. Securities and Exchange Commission into the initial coin-offering industry rattled some investors. An ICO is a fundraising method in which a company issues its own cryptocurrency, often in exchange for bitcoin.
But regulators earlier in February gave the cryptocurrency a boost, when in an appearance on Capitol Hill, they appeared to want to find the proper policy balance that will let the market evolve responsibly.
Rogoff said he believes regulatory moves on bitcoin have slowed because officials want to see how the technology behind digital currencies develops. Over history, the private sector has “invented everything,” when it comes to currencies, he noted.