Economist’s forecast: Bitcoin a lot more likely to be $100 than $100,000 in a decade

The likelihood of bitcoin prices tumbling to US$100 is greater than that of reaching US$100,000 a ten years from now, Harvard University professor and economist Kenneth Rogoff was quoted as saying in a CNBC report on Tuesday.

The cryptocurrency –now above US$11,000—has just risen above its 50-day moving average for the first time since January. Bitcoin is down about 16% this year, having fallen from its record high of above US$19,000 in December 2017.

"I think bitcoin will be worth a tiny fraction of what it is now if we're headed out 10 years from now ... I would see US$100 as being a lot more likely than $100,000 ten years from now," Rogoff was cited as saying in CNBC’s program "Squawk Box".

"Basically, if you take away the possibility of money laundering and tax evasion, its actual uses as a transaction vehicle are very small," Rogoff was quoted as saying.

While he was cited in the report as saying that regulations would be a trigger for the drop in bitcoin prices, he stressed that it would take time to develop a global framework of regulation.

"Even if the U.S. cracks down on it and China cracks down, but Japan doesn't, people will be able to still launder money through Japan," Rogoff observed.

He added that one reason governments have been slow to regulate the cryptocurrency is the anticipation of the technology behind it, according to the report.

The technology behind cryptocurrencies is blockchain, which is a distributed ledger technology that allows transactions to be recorded and maintained. 

Earlier this year, World Bank Group President Jim Yong Kom said he hopes blockchain could be used in developing countries to follow the money more effectively and reduce corruption though he compared Bitcoin to a Ponzi scheme.

"They want to see the technology develop," Rogoff was cited as saying. “The private sector has historically "invented everything" in the history of currency, from standardized coinage to paper currency.”