Bitcoin Price Reverses Course Amid Pessimistic Price Predictions

Yesterday bitcoin’s price touched a high of $11,650.46 and seemed poised to touch $12,000. Today it has reversed course as a bunch of East Coast economists came out against it. At 13:35 UTC, the price of a single bitcoin was $10,901.48, a drop of 4.68% from its price 24 hours ago. Among the top 10 most-traded cryptocurrencies, Monero continued its upward trajectory. The privacy-focused coin is up by 13% since last Friday on the back of investor enthusiasm about its impending hard fork. On a weekly basis, the coin is up by 33%. The hard fork, which is scheduled for March 14, will birth MoneroV. The new coin is expected to solve scaling problems for Monero and will have a limited, finite supply. This is unlike Monero, which has an unlimited supply. NEO continued to shed gains after criticisms about its blockchain’s performance. Still, the China-based coin is still up by 45.7% this year.    

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Transaction Volumes Decline For Bitcoin

The decline in bitcoin’s price occurred amid low transaction volumes for the cryptocurrency. According to research firm blockchain.info, transaction volume for bitcoin fell to a two-year low of 200,000 this past week. That’s exactly half of the overall transaction volume for bitcoin this past December. The slump in transaction volumes has corresponded with a decline in transaction fees and wait times. It could be due to two reasons: a cooling off of the intense volatility of the past few months or a return to a new normal. The rollout of the lightning network and SegWit initiatives, however, bodes well for a possible future spike in bitcoin’s price and volumes.

Harvard Economist Predicts $100 Price For Bitcoin

Thanks to its spectacular run up in the last couple of years, the range of predictions for bitcoin’s future price cuts a wide swathe. Count Harvard economist Kenneth Rogoff among the pessimists. In an interview with CNBC, Rogoff said that it was more likely that bitcoin would be worth $100 than $100,000 a decade from now. “Basically, if you take away the possibility of money laundering and tax evasion, its actual uses as a transaction vehicle are very small,” he said. According to him, the trigger for bitcoin’s decline would be a global framework for regulation. But that will take time to develop as governments around the world want to see the technology grow, he said.

Rogoff’s remarks follow a post by another economist Nouriel Roubini criticizing blockchain, bitcoin’s underlying technology. He called blockchain, one of the “most overhyped technologies ever” and provided a number of reasons for his claim. For example, the transaction validation process for popular algorithms such as Proof-of-Work (PoW) and Proof-of-Stake (PoS) is slow because it requires agreement from all nodes on a network. “The required storage space and computational power is substantially greater, and the latency higher, than in the case of a centralized application,” he writes.