Over the years, Bitcoin has done just one thing that is expected of every good asset class: to go up as the days progress. While much has not been said of other digital assets that came to life about the same time that the asset was rolled out, the digital asset has been able to open a world of possibilities for other assets.
Since it has been in existence, Bitcoin has gone from being worth a small cent to reach a massive price of $60,000 high. With that, the first-ever digital asset has become a force to reckon with in the financial sector and the biggest digital asset. Despite Bitcoin seeing remarkable growths, the digital asset has seen its antagonists argue that the price might eventually fall back to zero in the years to come.
Some detractors still feel the digital asset is useless
Some of the people that have held the view of the digital asset being useless are Calvin Ayre, a previous proponent of Bitcoin hard fork, Bitcoin Cash, and the CEO of Berkshire Hathaway, Warren Buffet. While Ayre noted at an event last year that Bitcoin is a useless investment, Buffet on his own has always held on to his belief that all digital assets should not be invested in. Another person is a close ally of Buffet, Charlie Munger, who has always talked about the digital asset with hate and disdain.
In a tweet that was taken off Ayre’s Twitter account in July Last year, he pointed out that the digital asset (Bitcoin) lacked scaling and would fall to zero not long. With that not distracting the entire crypto market, we have seen institutional investors’ efforts flooding into the Bitcoin network since last year. Recently, we have seen companies like Microstrategy, Aker ASA, and Tesla, among others, reiterate their support for the assets by making a massive amount of buys of the digital asset.
Yale economists say the probability of falling to zero is 0.4%
Asides from the buys made by institutional players, we have seen the fantastic success that Bitcoin ETFs have enjoyed since they debuted in Canada. Analysts have pointed to the influx of institutional investors into the Bitcoin space because the digital asset saw the recent surge in the market, which has taken the coin to touch an all-time high of $60,000.
With the coin now boasting a market capitalization figure of above $1 trillion, it is safe to say that the digital asset is going nowhere in the distant future. Even though that has been established, what are the things that would see the world’s biggest digital asset lose value and fall back to zero? It would take more than we can imagine.
A previous report that two economists at Yale University carried out talked about the risk and rewards of the digital asset and what would trigger the digital asset to go back to zero. When the report was published, the economists mentioned that it was either 0% or 0.4% for the asset to return to zero. Despite that, many analysts have argued that the lack of intrinsic value night sees the digital asset push down to claim the zero spot again.