Going ‘Negative’—The Bitcoin Price Worst-Case Scenario Explained
Bitcoin
BTC
and cryptocurrencies have suffered a catastrophic value crash during the last yr—with 2023 already off to a tricky start.
The bitcoin value has dropped to beneath $17,000 per bitcoin, down from nearly $70,000 in late 2021 (though one viral memecoin has rocketed into the new year).
Now, as serious survival fears swirl around some of the world’s biggest bitcoin and crypto companies, geopolitical strategist Peter Zeihan has outlined how the bitcoin value might fall beneath zero.
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The bitcoin value has crashed during the last yr, inflicting fears bitcoin could possibly be going to zero—or … [+]
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Bitcoin “serves no purpose, it’s not a store of value, it’s not a medium of exchange and as we’ve seen if you want to decentralize outside of government control it’s a haven for fraud,” Zeihan, creator of The Unintended Superpower, told podcaster Joe Rogan.
“[Crypto] is now in the process of going to zero except for bitcoin which will probably go negative because if we’re moving into a world with carbon taxes you have to take into account the energy to produce it in the first place.”
Bitcoin is “now starting to be priced appropriately,” Zeihan mentioned. The bitcoin value “has another $17,000 to go down. There’s no intrinsic value to this product.”
The bitcoin blockchain, a distributed digital ledger, is maintained by so-called miners who use highly effective, energy-demanding computer systems to safe the community in return for bitcoins.
After China expelled bitcoin miners in 2021, the U.S. grew to become the world’s largest bitcoin mining nation, contributing round 38% of the so-called bitcoin hash price according to the Cambridge Bitcoin Electrical energy Consumption Index.
Bitcoin mining makes use of eye-watering quantities of vitality to energy and funky computer systems, consuming as a lot electrical energy in 2022 as the entire of Sweden, in line with Digiconomist’s Bitcoin Power Consumption Index.
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The bitcoin value has suffered an almighty crash during the last yr however stays far greater than … [+]
Forbes Digital Belongings
Whereas renewable vitality sources make up almost 40% of bitcoin’s vitality consumption, the Bitcoin Power Consumption Index places the bitcoin community’s carbon footprint on the identical degree as Hong Kong.
Carbon taxes have been launched by nations world wide in recent times as they attempt to scale back their CO2 emissions. In June final yr, Danish lawmakers agreed the best company carbon tax in Europe. Nonetheless, the U.S. doesn’t have a carbon tax at a nationwide degree, with the Biden administration relating to the thought as politically dangerous and exhausting to get by way of Congress.
Regardless of bitcoin’s value crash during the last yr, many stay satisfied the value will ultimately roar again with Mark Cuban, the billionaire Shark Tank star and bitcoin critic-turned-crypto investor, revealing when he’d buy bitcoin again.
“Bitcoin became an ideology,” Zeihan mentioned. “People who really like bitcoin are convinced it’s the currency of the future, the decentralized ledger is the way to go, that anything is controlled by a government entity is by definition a negative and if it’s done by the private sector it will be better, but that’s just not how currency works.”
Bitcoin’s shortage, with a hard and fast provide of round 21 million bitcoins that makes it similar to digital gold, is called by bitcoin bulls as why it is superior to government-backed so-called fiat currencies that may be created by central banks.
“One of the craziest things about bitcoin is that there will never be more than X number of units of bitcoin [because] by default that means it can’t be used for trade,” Zeihan mentioned. “The whole idea of economic activity is that there’s expansion which means you need more currency to lubricate and manage that expansion. If currency is locked into a specific number you get monetary inflation and that’s one of the fastest ways to destroy an economic model.”
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