Economics Professor: Bitcoin Will Make Plenty of Millionaires
According to a recent write-up published by Panos Mourdoukoutas, Professor and Chair of the Department of Economics at LIU Post in New York who is also contributing to several professional journals and magazines, such as Forbes and The New York Times, until its dive, bitcoin will make many more people millionaires.
Bitcoin hit $3,000 this month after a big correction down to $2,682 from $2,957 in the period of two days. CCN reported that billionaire Mark Cuban was calling bitcoin’s recent price surge a bubble. However, this is not the case since the cryptocurrency is showing an uptrend, recently standing on $2,831 and continuously going upwards.
Mourdoukoutas shared a partly similar opinion to Cuban’s. Matching in the terms of saying that bitcoin’s price will drop after the huge surge, however, the university professor did not state that the cryptocurrency is a bubble. Mourdoukoutas added that the digital currency made many “overnight millionaires” – people who invested into BTC when it was worth only a fraction of its current price. He added that bitcoin will reach new highs, making more billionaires in the course of the action, before “coming back down to earth”.
According to Mourdoukoutas, one reason for the increasing investment into the cryptocurrency is the “ultra-low interest rate environment, which makes the trade of bitcoin an appealing proposition. In addition, there is a growing mistrust in the national currencies of multiple countries, following the government policies that pushed more investors into the cryptocurrency.
Mourdoukoutas said that one of these policies is the act when governments issue new treasury bonds at record low rates to cover the old debts with new ones. For example, Japan sells treasuries that yield almost nothing for the state, however, the country’s debts amount approximately the 250 percent of the GDP. The professor stated that China’s treasuries yield “something”, although, no one knows the exact amount of the “unofficial debt”.
The fact that there is a huge amount of debt connected to the Chinese Yuan and the Japanese Yen, makes the confidence of the investors disappear. And since there is bitcoin, a cryptocurrency that increased its value by 125 percent in 2016, people in Asia take advantage of the possibility and invest more into the digital currency. The university professor stated there is another government policy, which could decrease the trust in a country’s national currency. This move is when governments want to get rid of the old currency notes, as was the case in India and Venezuela. According to Mourdoukoutas, one of these actions started the recent bitcoin surge. Mourdoukoutas added in the write-up that there are certain advantages making bitcoin a better hedge than conventional ones, such as gold. He added that the millennial generation is one of the biggest supporters of the cryptocurrency as they understand BTC better than the “baby-boomer generation”.
According to the professor, bitcoin’s supply is expected to be limited to 21 million. Comparing to gold, there is no scarcity from the mineral since when the price of gold rises, it provides more incentive for gold miners to mine for gold. Finally, Mourdoukoutas stated that the investor hype around bitcoin continuously helps the cryptocurrency to go upwards, as more and more investors are becoming familiar with the digital currency, and can use ETFs (exchange-traded funds) to “conveniently participate in the market”.