Three world-renowned economists have warned that bitcoin could plummet to $100 after being “regulated into oblivion”.
Joseph Stiglitz , Nobel Prize-winning economist and former chief economist of the World Bank, says governments and authorities will “use the hammer” once crypto “becomes significant”.
“You cannot have a means of payment that is based on secrecy when you’re trying to create a transparent banking system,” Stiglitz told Financial News.
“If you open up a hole like bitcoin then all the nefarious activity will go through that hole, and no government can allow that.”
Economists Nouriel Roubini and Kenneth Rogoff have also led a joint attack on bitcoin, warning that governments will clamp down on criminals using the cryptocurrency to avoid taxes and launder money.
The price of bitcoin has fallen sharply from a high of almost $20,000 in December 2017 to below $6,000 at the end of June.
Rogoff, former chief economist at the International Monetary Fund and a professor at Harvard University, says government regulation would trigger further drops.
“Bitcoin could easily be worth just $100 in 10 years,” he said. “People in power will move to regulate anonymous transactions. That you can be sure of.”
Nouriel Roubini, the economist credited with predicting the 2008 global financial crisis, has repeatedly described bitcoin as “the mother of all bubbles” and insists that it’s destined for a crash.
He told Financial News: “For bitcoin to be a currency it has to be a unit of account, a means of payment, and a stable store of value.
“It is none of these. Bitcoin is not even accepted at Bitcoin conferences, and how can something that falls 20 per cent one day and then rises 20 per cent the next be a stable store of value.”