Bitcoin Will Crash If Government Regulates It – Harvard Professors

Bitcoin Will Crash If Government Regulates It – Harvard Professors

Once the countries’ authorities weigh in – bitcoin will lose in price. Such an opinion was expressed by two Harward Economics professors Kenneth S. Rogoff, and Jeffrey A. Miron. Two pundits have different thoughts on bitcoin’s drawbacks but it seems that both of them have to a conclusion that governments’ regulation may jeopardize the destiny of the world’s most known cryptocurrency.

“Anonymous” Key To Success

The crypto specialist Rogoff believes that currently, bitcoin is booming thanks to its so-called anonymity. This factor, in his opinion, fueled illegal activities in bitcoin markets, which have been conducted since bitcoin’s “birthday” nine years ago. Such criminal activities, according to Rogoff, include unpermitted gun trade, drug dealing, and supply of terrorists. Sure enough, the anonymity of bitcoin will come to an end when countries’ authorities intervene in the case.

“Small anonymous transactions with virtual currencies…would be desirable,” Rogoff emphasized. However, “large-scale anonymous payments would make it extremely difficult to collect taxes or counter criminal activity.”

Talking about governments, Rogoff mentioned China which has tabooed BTC exchanges. On the other hand, the professor gave Japan as an example, reminding that it legalized bitcoin. However, such actions may turn Japan into “Switzerland” with its bank-secrecy regulation with the help of tech trends.

End of Bitcoin?

His colleague Miron has a different view on bitcoin’s risks. This libertarian economist doesn’t believe that it’s anonymity which ties it to the world of culprits. He neither believes that it is less trustworthy than fiat money.

Firstly, according to his words, for centuries criminals used public currency for committing their malicious actions, so bitcoin is not new in this role and cannot be more dangerous than fiat. Secondly, almost everything that we have seen in various fields of human activities has transformed from material objects to virtual ones with time. Conversely, lots of positive trends emerged.

Miron also added that countries’ authorities should not bother themselves about payment solutions which are not government-controlled. However, he expressed the concern that later on governments will finally take over bitcoin:

“It [government] could let cryptocurrencies peacefully exist, and not accept them as a means of payment, and that’s what I think it should do. But my guess is that sooner or later governments are going to regulate cryptocurrencies out of existence.”

Rogoff, in his turn, believes that even if authorities don’t bring bitcoin to an end, they will definitely influence its price – negatively though. Once the governments will try to fight bitcoin’s anonymity, the price of it will go down. Furthermore, they will try to win creating their own cryptos, he concluded.