Vanguard economist Joe Davis says bitcoin (BTC) could become worthless.
In an opinion article at ETF.com, Davis writes that he is enthusiastic about the blockchain technology that underlies cryptocurrencies and notes that Vanguard is already using it. But he says there’s a “decent probability” that bitcoin, the world’s largest cryptocurrency, could become worthless.
He writes that bitcoin does not meet one key requirement of a real currency: serving as a store of value. “Its price volatility undermines its adoption, as fewer vendors will accept a currency whose value can fluctuate so dramatically,” he writes. “The prices of newer currencies have been similarly volatile.”
The biggest threat to bitcoin and other cryptocurrencies are central banks, Davis adds. Central banks have begun researching blockchain-based currencies and “have good reason to adopt digital currencies in the coming decades,” Davis writes. “If the choice were between bitcoin or a blockchain-based dollar, which would you rather have in your digital wallet?” Read more here.