John Hopkins University’s Steve Hanke: Bitcoin Is Vulnerable To Fraud, Reliability Questioned
Steve Hanke – Bitcoin Is Unreliable And Vulnerable To Fraud
Prominent economists have had differing opinions over various issues concerning Bitcoin and other digital currencies, such as hash rates, block sizes, and interest rates. Traditional market analysts, on the other hand, have generally maintained that it is impossible to decentralize the financial system using cryptocurrencies.
Steve Hanke, an economist at the John Hopkins University, recently called out Bitcoin as an unreliable digital asset that is extremely vulnerable to fraud. He went in to say that he doesn’t regard Bitcoin as a currency – rather, he marked it as a highly-speculative asset, despite having a market cap value exceeding $100 billion.
Furthermore, Hanke warned investors of falling victim to Bitcoin’s recent price surge. In this regard, he pointed out that the 6% price gain is paltry as compared to the massive plummeting the coin experienced throughout 2018. Last year, the entire crypto market underwent a huge slump that resulted in the overall market cap dropping drastically from $800 billion to $100 billion in the space of 12 months.
The price of Bitcoin has fluctuated massively since the beginning of the year. In February, the cryptocurrency hits its lowest prices in over a year, trading at $3,400. In the following months, the value increased steadily. The asset is currently approaching the $5,900 mark, representing a remarkable 72% increase from February’s record low. Contrarily, traditionally stable such as gold have been plummeting in value, resulting in investors abandoning them in favor of improving digital alternatives.
Although he is overly critical of cryptocurrencies, Hanke entered a partnership with a crypto-based startup in November last year. The project, known as AirTM, is a digital trading platform that is working with the economist to develop price-stable crypto assets (stablecoins) for the Latin America market.
So far, Hanke and AirTM have launched an initiative known as ‘Airdrop Venezuela’, which intends to raise $1 million worth of virtual currencies. Once attained, the funds will be disbursed to Venezuelans who are currently experiencing economic hardships resulting from hyperinflation and a subsequent devaluation of the local fiat currency. The money will be retrievable using AirTM digital wallets. By participating in this drive, Hanke demonstrated one of the key benefits of cryptocurrencies, which is facilitating the seamless cross-border transfer of funds.
As expected, pro-Bitcoin analysts have opposed Hanke’s recent opinion. Nic Carter, an expert from CoinMetrics, said that he was shocked by Hanke’s dismissing comments on Bitcoin, especially given its useful impact in countries affected by inflation. On their part, Civ Ekonom pointed out that the price of Bitcoin is insignificant provided that it serves its intended purposes of promoting financial freedom and enhancing decentralization. Lastly, popular cryptocurrency influencer, Crypto Bitlord, said that price fluctuations are a norm for any currency, alluding to the basic principles of economics.