Five Times Experts (Wrongly) Declared ‘Bitcoin is Dead’
Bitcoin is dead. This, at least, seems to be an increasingly popular view, judging by the rising number of opinion articles published in the mainstream media, all of which seem to take an I-told-you-so glee in the decline of cryptocurrency prices. It’s also a picture that emerges from Google Trends data, which reveals that searches for “bitcoin dead” and “bitcoin is dead” have reached record highs in various parts of the world.
However, Bitcoin and the cryptocurrency industry have been in this position on more than one occasion in the past. Stretching as far back as 2011, writers and experts have been impressively eager to proclaim the death of Bitcoin and cryptocurrency, yet in every instance, the market has risen from its ashes to prove naysayers wrong.
This article collects some of the more notable examples of experts wrongly declaring ‘Bitcoin is dead.’ If nothing else, what these examples show is that such declarations should be taken with a large pinch of salt, particularly when the industry is noticeably bigger than it was the last time Bitcoin died.
So, That’s the End of Bitcoin Then: June 2011
While we could find an example of someone predicting the death of Bitcoin in 2010, the earliest example published in a prominent outlet comes from June 2011, when Forbes published an article with the title, ‘So, That’s the End of Bitcoin Then.’
Written by Tim Worstall, a blogger/writer, and Senior Fellow at the Adam Smith Institute, its basic argument was that the price of bitcoin had fallen sharply (from about $17 to a few cents), so it, therefore, had failed in its mission to be a decentralized currency.
Worstall argued that any usable currency should be able to serve as a medium of exchange and store of value, while also being liquid and secure. Since bitcoin didn’t have any of these features in “appreciable quantities,’ it was bound to fail.
Well, needless to say, it didn’t fail, and 11 years later it’s still here. Yes, it remains volatile, but that hasn’t stopped people from investing in it and turning to it when national currencies decline substantially.
Bitcoin is Still Doomed: November 2013
Bitcoin may have been worth only a few dollars in 2011, but by December 2013 it rose as high as $1,100. Its rapid ascent — from about $130 at the start of October — didn’t stop more than a few skeptics from predicting its ‘inevitable’ demise, as did technology journalist Timothy Lavin for a Bloomberg article published on November 20 of that year.
Here, the same argument was trotted out again: bitcoin’s price fluctuates strongly, so it can’t “plausibly work as a medium of exchange.” On top of this, Lavin also implied that regulation would remove any benefits it then offered over preexisting currencies, while its association with the dark web would tarnish its reputation, and “reputation is all it has.”
Fast forward nearly ten years, and Bitcoin’s mixed reputation hasn’t doomed it (‘yet,’ a critic might add). Regulation has arrived in many parts of the world, and much of it has been favorable, with a recently proposed bipartisan bill in the US also favorable on the whole.
Slowly But Surely, Bitcoin Appears to Be Falling Apart: January 2015
In 2015, the cryptocurrency market was still suffering through a post-2013 winter. January 14 of that year saw the price of bitcoin drop to $172, having been as high as $418 in November 2013.
It was on the very same day that political magazine the New Statesman ran an article on its site titled, “Slowly but surely, Bitcoin appears to be falling apart.” Written by one of its science and technology writers, Ian Steadman, it once again highlighted volatility as the main reason Bitcoin was destined to fail. It also used BTC’s descent from above $1,000 in late 2013 as evidence that its decline was terminal, with Steadman concluding that “there’s no reason to think it won’t keep falling.”
Another ingredient in the New Statesman’s case against Bitcoin was that rising mining costs — and a falling BTC price — would mean that smaller miners would be pushed out, and that large, monopolistic pools would take their place. In turn, the existence of dominant pools would raise the threat of a fatal 51% attack: “anyone who managed to control every computer within the pool could, if they wanted to, completely fabricate a new blockchain, and with it give themselves as many coins as they want.”
Needless to say, a 51% attack hasn’t happened since Steadman wrote the article. And bitcoin hasn’t fallen to $0.
Crypto Bubble Went Bust for Good: November 2018
Nouriel Roubini may have had the distinction of being one of the few economists to predict what would become the financial crisis of 2007–8. However, his consistently negative remarks regarding cryptocurrency underline how no one has a crystal ball.
Indeed, on November 20, 2018, the NYU professor of economics triumphantly tweeted, “I rest my case that this crypto bubble went bust for good.”
Given that the price of bitcoin had fallen to around $4,000 (from $19,783 in December 2017), his claim didn’t seem ridiculous at the time. Of course, the price of bitcoin had recovered to $63,000 by April 2021, so the “for good” part of his declaration wasn’t entirely accurate.
Bitcoin Will Not Recover: June 2022
Interestingly, Peter Schiff was another rare economist who predicted the financial crisis of 2007–8. And much like Nouriel Roubini, he has also long been predicting the collapse of the cryptocurrency market and industry, having warned traders not to buy the dip in late 2018.
Schiff has reprised his role as a crypto skeptic in recent weeks. On June 18, he tweeted that the ongoing crypto crash is only “just beginning,” and that “Bitcoin will not recover.”
Schiff’s argument here seems to be that, due to the greater amounts of wealth lost and all the leverage involved, traders and investors will be turned off crypto permanently. However, losses and leverage on their own aren’t enough to ‘prove’ that the market is dying, if only because the traditional stock market has suffered massive losses before, and presumably recovered.
And in all fairness, one could flip Schiff’s argument around and claim that, due to its bigger size this time, the cryptocurrency market is even more likely to recover from the current downturn. Its size indicates not only that more people have accepted it this time around, but also that more companies and funds are invested in making it a success.
Of course, only time will tell just how far crypto can grow. But given the sheer number of times experts have been wrong in the past, it would be premature to declare that Bitcoin is dead.
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