Shutterstock photo Sorry, Bitcoin ( BTC ) investors. The coin had just broken new ground, finally scaling past a $7,800 barrier over the $8,000 mark. Yet, as any crypto bull will tell you, part of the bet comes with unruly swings in price. In the game of Bitcoin, what comes up sometimes can come back down- as quickly as investors started to get out the words “bull run.” It’s no surprise that one market expert has called the coin ‘evil.’
Using the screener platform at Coinwatch.com , we tapped the latest insights in the crypto space.
Let’s explore.
Today, the biggest cryptocurrency coin in the globe has dropped off to $7,635.39 with a $131.33 billion market cap. How quickly the tides can turn.
It was mid-December 2017 when the coin had enthusiasts angling for a $20,000 break. Now, it’s hard for the coin to stay above $8,000- and sustain the momentum.
While Bitcoin seemed to be on the brink of a monster rally (after a months-long ‘crypto winter’), first Google-parent Alphabet ( GOOGL ) news broke. The Google Play Store is set to ban all Bitcoin and crypto mining apps- which follows Google’s block on Chrome extensions mining crypto months back.
See GOOGL Price Target and Analyst Ratings Detail .
Paul Krugman, who has won a Nobel Prize in Economics for his work, just came out with a fresh bearish hit against the crypto giant. It’s not Krugman’s first slam at Bitcoin, having written in the New York Times that the coin is “evil” and “the long cryptocon.”
The latest denouncement: Krugman says Bitcoin and the rest of the crypto-verse are stifling modern-day economics.
Just how bad of a regression does Krugman size up? A severe 300-year powder keg, ticking for an explosion. Krugman sees friction once again in the monetary backdrop in terms of mining transaction-related expenses and validating the blockchain transactions.
Krugman’s two bones to pick with Bitcoin: 1) its transaction expenses 2) Bitcoin’s “lack of tethering.” The economic guru’s bet: Bitcoin is “likely” set for a “total collapse.”
By tethering, Krugman means crypto coins stand untethered to “reality.
” In other words, the value of a crypto coin is continent wholly upon “self-fulling expectations;” and that indicates “total collapse is a real possibility.” One “collective moment of doubt” where the public suddenly got spooked that the coins were “worthless,” and- “well, Bitcoins would become worthless.”
In January, Krugman tweeted : “Blockchain is very clever.
But I’m still having a hard time seeing why it’s needed. How many of us need to be able to make anonymous transactions using crypto to verify our ownership of assets? It’s a costly thing, and fraud by financial institutions not so big a deal.”
By the end of July, Krugman certainly hasn’t budged from his bearish stance. Krugman simply does not understand the crypto craze’s purpose, and only sees harm to come from the technology.
Looking at the “history,” all the positive sentiment strikes Krugman as “very odd,” going “exactly in the opposite of the long-run trend.”
To put it bluntly: “cryptocurrency enthusiasts are effectively celebrating the use of cutting-edge technology to set the monetary system back 300 years.” Krugman counters, “Why would you want to do that? What problem does it solve? I have yet to see a clear answer to that question.
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Krugman is not the only economics expert seriously skeptical on Bitcoin’s opportunity. Consider Yale University’s economics professor Robert J. Shiller predicts Bitcoin could fall through the cracks in 100 years.
Shiller told CNBC that even “if it exists,” the coin won’t be called Bitcoin anymore. “Bitcoin won’t look anything like it is today… There will have been many hard forks changing it and changing it.” Whether Bitcoin still exists will come down to a point of contention by that time.
It “looks like a bubble” here and “it’s so hard to predict these things.
” The very volatility of the crypto-verse is what keeps bulls and bears divided- a double-edged sword. Shiller remembers right after 2013 when the coin edged past $1,000 to proceed to crash 80% in value. “It looked like bitcoin was just fading away.”
In June, Switzerland’s Bank of International Settlements (BIS) had issued a report that struck digital currency fears, advising Swiss citizens to sidestep the craze.
“Put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster.”
Will the crypto giant soon meet its crack of doom, like these economic gurus caution? If not, bulls will one day reap a rollercoaster-ride of profits. Next week could bring a new string of press that pushes Bitcoin back up- or topples it in value again.
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This article was written by Julie Lamb.
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