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Steve Hanke: BTC is Just Highly Speculative Asset

Wed, 07/21/2021 - 14:19
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Alihuseyn Gulu-Zada
Steve Hanke named the main reason why Bitcoin will never be a reliable unit of account
Steve Hanke: BTC is Just Highly Speculative Asset
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Famous economist, professor and cryptoskeptic Steve Hanke expressed his attitude toward Bitcoin as a means of payment in another tweet.

"Excessive volatility"

He said that, while many people see Bitcoin as "the currency of the future," its excessive volatility should constantly remind them that it will never be a reliable unit of account.

Hanke reinforced these thoughts by saying that the excessive volatility of the first cryptocurrency is the reason why the first cryptocurrency will never be considered a currency.

Among other reasons for this, the professor previously recalled the high transaction fees that users are charged when converting Bitcoin into U.S. dollars and vice versa.

That is why, according to Hanke, cryptocurrencies will never be fully used in everyday transactions.

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Criticism through satire

Summarizing the above, Hanke concluded that Bitcoin is merely "a highly speculative asset." The professor has repeatedly expressed his belief that cryptocurrencies cannot be turned into a real means of payment to be used quickly and cheaply.

Interestingly, he backed up his tweet with an amusing satirical cartoon in which Godzilla and King Kong are distracted by the sound of something falling heavily in the city. At the moment of the collision, Godzilla says, "Look! Bitcoin!"

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The gold factor

As a reminder, these are not the economist's first public statements. Hanke has previously stated that cryptocurrency could be a real currency if it were pegged to gold. He has also repeatedly criticized governments considering adopting Bitcoin.

For example, regarding the adoption of Bitcoin as official tender in El Salvador, the skeptic opined that the move would "drain the economy."

He reasoned that Bitcoin holders from other countries intending to cash in on the digital currency would target the South American country and deprive it of dollars.

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About the author

Alihuseyn graduated from Yale University with a focus on linguistics and philosophy. He has worked as a journalist-analyst for Trend News Agency. At the same time, he is an academically trained singer (baritone) and a composer. Alihuseyn has been involved in cryptocurrency and blockchain since 2017 and is an enthusiast in this field, considering blockchain technology revolutionary and capable of changing society. In this area, he has written several theoretical and analytical pieces.