Lights off for Bitcoin party: The road to $100 (not $0) price has began
If you’re not a fan of rollercoasters, you’ll be happy to know that Bitcoin’s high flying stunts and scary gravity falls will eventually come to an end, although digital currency will survive in some form or another.
How soon, no one can be really sure, a decade maybe, according to a former IMF official, but people are still getting in line for their one way to random high stakes, buying low and still getting burned.
There are serious signs that certain technical malfunctions are making a dangerous ride, and a few screws loose for those who dare.
Here’s the bad news first.
Bitcoin’s dangerous descent
According to Bloomberg, Bitcoin’s 30% price slide to start the year erased $44.2bn off the $200bn market value (Market Cap) generated in all of 2017, the biggest one-month loss in the short history of digital assets.
$60bn has been wiped off the value of bitcoin, according to analysis of data from Coinmarketcap.com.
At $10,000 and below, Bitcoin dropped 50% of its value from December 2017 highs following the introduction of futures exchanges CME and CBOE for the digital currency.
Stephen Innes, head of Asia Pacific trading at Oanda, told Bloomberg: “When we’re talking in the realm of riskier assets, and something shaves off 50 percent of its value, it tells me there’s going to be an extension lower. The sad thing is a lot of people will be burned, because they will continue to buy dips.”
The $500 million heist at Japanese exchange Coincheck Inc. on Jan. 26 doesn’t help much and put additional pressure on regulators to scrutinize businesses and investors, as countries like South Korea, and China are banning exchanges altogether.
South Korea’s customs service said Wednesday that it had uncovered cryptocurrency crimes worth $594 million.
“Innes sees the cryptocurrency tumbling further to the $5,000-to-$6,000 range before eventually recovering to $10,000-to-$15,000,” said Bloomberg.
Really? Here’s the worst news.
Try $100 for crypto at best
Business Insider’s (BI) interview with former IMF chief economist and Harvard University professor Ken Rogoff at the World Economic Forum in Davos, revealed he’s of the opinion that Bitcoin is an ideal solution to launder money or evade taxes.
“I think the government will eventually have to regulate it severely and I think someday will issue its own digital currency,” he told BI.
“I’m sorry but when it comes to the monetary system, the government makes the rules. You cannot win the game. If they’re not winning, they will change the rules. That’s what will happen here.”
He said that one will witness a new currency generation that’s used for transactions, but not anonymous transactions.
“We will see at some point a cryptocurrency 2.0, which is not crypto, it’s not anonymous,” Rogoff said.
“These substitutes for debit cards, credit cards, cash, makes electronic transfers more secure. I think there are a lot of ideas out there. They’re also a lot of people who are rushing to cash in on the craze and just trying to make money.”
Rogoff said that Bitcoin in particular is much more likely to be worth $100 than $100,000 ten years from now.
“I don’t think it’s going to zero, because they’ll be places where they’d want to launder.”
“So I don’t think you’re going to wipe it out. I think you will have governments use it. But in the mainstream government, it’s not going to be legal in banks; it’s not going to be legal in retail transactions unless it’s not anonymous.”
Ready for a hard landing?
More slump, more dump
Forbes said with the exception of Ethereum, all major cryptocurrencies are down simultaneously.
“In the last seven days, Bitcoin is down 10.1%, Ripple is down 17.23%, and Litecoin is down 10.4%; and all are 50% or more below their all-time high back in December,” Forbes said quoting Coinmarketcap.com.
“Worse, the sell-off has been extending across the entire cryptocurrency list with 79 cryptos in the top 100 dropping.”
Forbes said that money getting out of major cryptocurrencies is leaving the entire asset class.