Over the past week, Nobel laureates Joseph Stiglitz and Robert J. Shiller claimed governments will ultimately “outlaw” and crack down on bitcoin in the long-term.
“Bitcoin, it’s just absolutely exciting. You’re fast. You’re smart. You’ve figured out nobody else understands. You’re with it. And bitcoin has this anti-government, anti-regulation feel. It’s such a wonderful story. If it were only true.”
Nobel laureates and leading economists along with bankers truly understand and fear the disruptive nature of bitcoin and its decentralized structure which threatens the very existence of central banks and the global fiat-based monetary system.
But, bitcoin disrupts the entire worldview of these conventional economists, and the system of finance they have studied for many decades. Shiller claimed that bitcoin has an anti-government and regulation “feel.” The bitcoin market has proven for nine years that decentralization and transparency provide security value to the Bitcoin network and the currency. It has evolved into a $183 billion market within a decade.
Economists like Shiller persistently claim that governments have the authority to outlaw or shut down the Bitcoin network, which is entirely inaccurate. The sole reason bitcoin is a viable replacement of the global banking and fiat system is because it eliminates money and state, as ShapeShift CEO Erik Voorhees famously said.
Bitcoin and decentralized cryptocurrencies eliminate an important source of power for governments that is leverage over reserve currencies. The Federal Reserve Bank of the US, the central bank of the country for example, has the ability to produce tens of billions of dollars at their demand through “quantitative easing.” Governments have absolute control over the current financial system and bitcoin eliminates the manipulation of the global finance market through a currency that exists peer-to-peer.
For the vast majority of economists, it is challenging and perhaps humiliating to adopt bitcoin and embrace the cryptocurrency. Hence, most of the economists like Shiller have chosen not to adapt to the change bitcoin and the cryptocurrency market have started to lead in the finance sector.
However, the abrupt alteration in tone of economists has begun to become more evident and obvious to the public eye. Shiller claimed that bitcoin’s value will surge and plunge in the long-term. Shiller stated that the price of bitcoin will not plummet to zero though, just to a lower value.
Previously, many economists including Shiller claimed that bitcoin is a scam, a bubble, and a fraud that will eventually be banned and dissipate in the upcoming years. Within a year, because of bitcoin’s exponential growth rate, most economists changed their tone in regards to bitcoin’s future.
“I don’t know where it’s going to stop. It’s going to go way up, like the stock market in the 1920s. We will reach a 1929 eventually. But then it won’t go to zero, it just will come down,” said Shiller.
Nine years in, governments such as the US, Japan, South Korea, and Russia could have banned bitcoin. Instead, leading governments and countries have implement strict regulations to oversee the rapidly growing bitcoin market.
At this phase, the probability of governments attempting to “outlaw” or “banning” bitcoin is close to zero, given that any form of aggressive regulation will lead to the bitcoin market moving underground, which is significantly more difficult to regulate.
Last modified: May 20, 2020 9:17 PM UTC