From mulling on interest rates and money supply to hashrates and block sizes, the elite economists have often been at loggerheads with Bitcoin [BTC] and the larger cryptocurrency realm. The traditional market analysts, more often than not, chide decentralized currency as a pipe dream.
One economist took his comments one step further, calling out Bitcoin as “unreliable” and an asset that is “susceptible to frauds”; such was the opinion of Steve Hanke, the American economist at the prestigious John Hopkins University. The economist separated Bitcoin from the definition of a “currency” and labeled the asset, which recently crossed the $100 billion valuation mark, “highly speculative”.
Bitcoin’s price ascendance, especially in the past few months was referenced by Hanke, although he cautioned readers to not “be fooled” as the 6 percent gain is meager in comparison to its “huge plunge”. It can be assumed that Hanke is alluding to the crypto-winter which collapsed the market from over $800 billion in January 2018 to just above $100 billion in December of the same year.
Hanke’s tweet read:
“#Bitcoin is up 6% to its yearly high of around $6,000. Don’t be fooled, a 6% uptick is nothing after its huge plunge. Bitcoin in unreliable and susceptible to fraud, it is not a currency, but nothing more than a highly-speculative asset.”
Since the year began, Bitcoin has seen several cycles of price movement, resulting in the coin bottoming at just below $3,400 in February 2019, only to rise by a massive 71.88 percent to $5,844 in May, with constant gains seen throughout March and April. On the flipside, stable assets like gold have been declining in value leading to many opting for the digital equivalent to the real thing.
Despite being a vocal cryptocurrency skeptic, comparing digital assets to the Dutch tulip mania of the 1700s, Hanke, back in November 2018, joined forces with a cryptocurrency start-up. AirTM, a cryptocurrency exchange partnered with Hanke to build their price-stable assets for their Latin America division.
With the objective of addressing the economic situation of Venezuela, the economist came up with an initiative called ‘Airdrop Venezuela’, bidding to raise $1 million in crypto and later disseminating it to locals, who will retrieve this through AirTM digital wallets. In this endeavor, Hanke complied to the universal access provided by cryptocurrencies as a delivery mechanism to the needy.
However, his noble cryptocurrency implementation aside, Hanke’s recent statement on Bitcoin has, unsurprisingly, been met with backlash from crypto-proponents. Nic Carter, from crypto-analytics firm CoinMetrics, stated:
“Surprising to see you totally dismiss Bitcoin, especially given its popularity and usage in high inflation countries. Am a fan of your work nevertheless.”
Crypto Bitlord, a popular cryptocurrency influencer added, referencing a unique and recurring feature of Bitcoin based on the foundational principle of economics,
“Not very smart for an economist!
Supply halves every 4 years whilst more people buy it every day.”
Civ Ekonom highlighted the price insignificance of Bitcoin to its larger goal:
“The price might be unreliable, but Bitcoin is not its price. Bitcoin is the most reliable piece of ledger in this world. Much more reliable than fiat for instance.”
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