June 6, 2023

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

“In view of the enormous volatility of cryptocurrencies, they will never become a full-fledged currency, and make money on only a few exchanges will be able to fluctuate, ”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.

“A priori cryptocurrency cannot become officialcurrency, because the authorities of the countries will not be able to issue their bonds on it. And because of the huge 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.

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

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 has organized the futures market inChicago. If the price rises too high, they will lower it until people in East Asia panic and decide to exit the instrument, says Xie. - In fact, their profit is formed in East Asia. They created an ecosystem in which the game is constantly ongoing. Moreover, this game is becoming increasingly important for those who have cryptocurrencies as their main source of income. East Asians lose about $ 100 billion each year in gambling. Cryptocurrencies absorb this business. After some time, you will be able to see how real casinos will close. ”

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