Renowned economist Mr. Nouriel Roubini thinks the value of bitcoin will be zero.
The chairman of Roubini Macro Associates said in a debate with BitMEX co-founder & CEO Mr. Arthur Hayes that bitcoin will never become a trillion dollar asset class. He reminded that bitcoin has not become what it’s supported projected it in the early days: a secure, scalable, and speedy alternative to traditional finance systems. Instead, the cryptocurrency grew up to be a speculative asset which, if put against the world’s leading payment systems like Visa, executed an exponentially lesser number of transactions.
“Bitcoin is not scalable,” explained Mr. Roubini. “It does five transactions per second. On the other hand, Visa does 25,000 Transactions per second.”
Bitcoin Hype Created to Make Money for Middlemen
Roubini alleged that nobody in their right mind accepts a cryptocurrency whose price drops by more than 30 percent in a week. He pointed fingers at Mr. Hayes for cashing on the idea of “banking the unbanked” and using bitcoin as a trading tool, off to make profits. Excerpts:
“Bitcoin is not used for any real transaction. It is a business of one shitcoin getting traded against another shitcoin and then the middlemen like him [Roubini pointed at Hayes] could make money.”
The scholar’s statements followed Hayes optimistic projection of the bitcoin technology. The BitMEX CEO considered the cryptocurrency as a medium to introduce financial sovereignty among people, stating that an increase in scrutiny at the hands of government and regulators would prompt average Joes to look for independent financial solutions in Bitcoin.
“Physical cash will be outlawed, which today is the most anonymous form of payment. Once that is stripped away, and people see their whole financial existence will be monitored and controlled by governments and large corporations, they will look for something different. And that is what bitcoin represents.”
On being asked about where he sees bitcoin in the next five years, Roubini responded with “zero.”
The economist remained unfazed by the cryptocurrency’s swift price recovery in 2019, wherein it surged by more than 200 percent on a year-to-date basis. He rubbished the BTC gains as an act of price manipulation, citing how the cryptocurrency’s peers lost 99 percent of their value from their respective all-time high despite the price rally.
“The top ten cryptocurrencies are down 75-to-90 percent even with the recent rally that is driven by price manipulation. Bitcoin is still 50 percent below the peak and lost one-third of its value in the last week. This is not going to be a trillion dollar asset class; this is going to be an asset class that goes asymptotically towards zero.”