Economist Andy Xie insists that crypto coins will never become a full fledged currency due to the volatility, and only a few exchanges will be able to make money on fluctuations in rates, The Korea Times reports.
“Many people believe that Bitcoin can replace fiat currency. However, because of the high volatility, this is impossible.”
Xie also stated that bitcoin is a popular way to gamble among Chinese, Korean and Japanese.
Andy Xie previously worked as an economist at Morgan Stanley. He is known for his accurate forecast of the Asian currency crisis of 1997–1998. Xie believes that the formation of Bitcoin as the official currency will cause huge financial damage to many governments.
Xie noted that crypto can not become an official currency as the authorities of the countries will not be able to issue the bonds on it and as a result of the high volatility, many countries will go bankrupt.
Speaking about Facebook’s Libra, Andy Xie noted that this is a smart plan aimed at attracting users to the company’s products. However, it will have a negative effect on Bitcoin, as it will increase the supply of crypto substitutes. At the same time, he mentioned that people will realize that crypto coins are becoming more legitimate and this is a positive point.