Often, the first cryptocurrency is predicted to collapse. Experts told how realistic such a scenario is and what can prevent the depreciation of a digital asset
Throughout the history of bitcoin, there have been several cases when its price fell to levels close to zero. For example, this happened in the event of technical problems on crypto-exchanges, like when in March 2019 the price of BTC on the BitMax platform fell from $ 10 thousand to $ 0.3. And in May of the same year, the value of the asset dropped to 0 on the BitMEX exchange.
The fall in the rate on individual exchanges does not affect the value of the asset as a whole and the situation on the market. However, according to renowned American investor Jim Rogers, the first cryptocurrency could depreciate as it is in a bubble.
There are several factors that could theoretically lead to a drop in the price of bitcoin to zero, explained the co-founder of BitCluster Sergey Arestov:
- A group of miners will switch over 51% of the power and arrange a sabotage;
- Someone will develop an ASIC chip that will pick up 500 trillion seed phrases per second;
- A total blackout will happen on earth and there will be no electricity;
- Miners will refuse to process transactions;
- The Internet will break down globally.
“But all this is unlikely. If, for some reason, Bitcoin becomes irrelevant, many other useful blockchain projects will remain, ”Arestov says.
Theoretically, for the maximum possible depreciation of bitcoin, something serious must happen, contrary to the fundamental values initially laid down in the protocol, said Dmitry Machikhin, CEO of Bitnalog.
For example, if it suddenly turns out that Bitcoin was just another project of Mark Zuckerberg to collect information about its users, then the price collapse will break through the long-term upward trend and go into free fall, the expert explained. But even then there will be those willing to buy back the asset for next to nothing.
The expert called quantum technologies a serious long-term risk, namely the potential of a quantum computer that could instantly mine all the remaining bitcoins.
“The disappearance of bitcoin is real as much as a complete shutdown of the Internet is real. The depreciation of bitcoin is a little more realistic, but the deflationary model and the economy embedded in its basic structure prevent this from happening. Mathematically, bitcoin can only rise in price, "Machikhin emphasized.
If Bitcoin depreciates, most likely it will mean the end of the entire cryptoindustry, warned Ivan Sharov, CEO of the online store of mining equipment and computer components Hardvar.ru. However, he called such a scenario extremely unlikely, if not impossible in the foreseeable future.
Now bitcoin will no longer be able to depreciate, since for this the demand for cryptocurrency must be zero, Sharov noted. According to him, in the current situation, the lower the price of bitcoin drops, the more people will be willing to buy the asset. Also, the emergence of any new technologies replacing the blockchain is capable of bringing the bitcoin rate to zero, but this is unlikely to happen in the coming years, Sharov added.