Who does not like to make a little prediction on Bitcoin price? Think Arthur Hayes who believes BTC will cost $50 000 by the end of the year. Or think big like John McAfee who promises that it will be trading at $500 000 if he is elected POTUS. But Peter Tchir, a macroeconomist, explains why he does not recommend buying more BTC and why we should take these predictions with a pinch of salt.
In his recent articles for Forbes, which has gone relatively unnoticed, he claimed that the reason why Bitcoin price has decreased is that “it has lost its way.”
“Quite simply, interest in bitcoin is melting, along with its price. That makes perfect sense to me, as I view bitcoin’s price as a function of the market’s perception of the anticipated new adoption rate. That new adoption rate is low. Very low,” writes Tchir.
He elaborates by saying that “very few believe it to be an efficient means of buying or selling anything.” But not only that: The anonymity associated with BTC is no longer the case really if we do not take into account states with oppressive regimes. Otherwise, BTC is becoming more and more integrated into the mainstream. Hence governments are willing to tax and regulate it like, for instance, Austria is planning to do or the State of Florida.
Tchir does admit that BTC is still quite a good investment, as it” was worth “only” $2,500 this time last year, so even at $6,000 it has had a good one year return, and it was barely $600 at this time in 2016, creating a truly great two-year return.”
At the same time, he is surprisingly not a big fan of decentralization admitting he never understood why it is a good thing and that he also believes that many ICOs deserve regulatory scrutiny.
And while Tchir does say that “for several years, many pundits, including myself, have discussed the possibility that a cryptocurrency could fulfill all of the promise of digital money, but that it wouldn’t be one of the first generation “coins,” he also believes that perhaps the future lies in new cryptocurrencies echoing the view of the former National Economic Council director and COO of Goldman Sachs, Gary Cohn.
At the same time, he does not hide the fact that he finds those predictions whether by Hayes or anyone else to be baseless and such which are dictated by vested interests, “I spent a few minutes googling the prognosticator to see if anywhere was he on record being bearish on crypto. Not surprisingly, at least not to myself, I couldn’t find any such bearish predictions from him.”
He is also critical of the media which likes to spread these type of predictions, “There are a lot of rules surrounding announcements and prognostications from CEO’s, and even pundits, in the security markets. Shouldn’t we be doing a better job on crypto?”