June 16, 2024

Ex-economist Morgan Stanley: “Cryptocurrencies will never become a full currency”

“Due to the enormous volatility, cryptocurrencies will never become a full-fledged currency, and making money ononly a few exchanges will be capable of rate fluctuations,” — said economist Andy Xie.

In a conversation with The Korea Times, Xie said Bitcoin is a popular way of gambling among Chinese, Koreans, and Japanese.

“Many people believe that bitcoin can replace fiat currencies. But because of the great volatility, this is impossible. ”

Andy Xie previously worked as an economist at MorganStanley He is known for his accurate forecast of the Asian currency crisis of 1997-1998. Xie believes that the establishment of Bitcoin as an official currency will cause enormous financial damage to many states.

“Cryptocurrency a priori cannot become officialcurrency, because the authorities of the countries will not be able to issue their bonds in it. And because of the enormous volatility, many states will go bankrupt,” — says the economist.

Xie also spoke about the cryptocurrency initiative Facebook - Libra. According to him, this is a clever plan aimed at attracting users to the company's products.

“The development of Libra should give a negativeeffect for Bitcoin because it will increase the supply of cryptocurrency substitutes. But there is a positive aspect to this - people realize that digital assets are becoming more legitimate, and will begin to enter this industry again,” — Xie stated.

The economist believes that Bitcoin will not be able to update the historical maximum and rise above $ 20,000, because Wall Street traders will not allow this.

“Wall Street organized the futures market inChicago. If the price goes too high, they will lower it until people in East Asia panic and decide to exit the instrument, — Xie says. — In fact, their profits are generated in East Asia. They have created an ecosystem where the game is constantly ongoing. Moreover, this game is becoming increasingly important for those who have cryptocurrencies — main source of income. Residents of East Asia lose about $100 billion every year on gambling. Cryptocurrencies are gobbling up this business. After some time, you will be able to see how real casinos will close.”