“Cryptocurrencies will never become a full currency”

“Due to the huge volatility, cryptocurrencies will never become a full-fledged currency, and only a few exchanges will be able to make money on fluctuations in rates,” said economist Andy Xie.

In a conversation with The Korea Times, Xie said that Bitcoin is a popular way to gamble among Chinese, Korean and Japanese.

“Many people believe that Bitcoin can replace fiat currency. But because of the high volatility, this is impossible. ”

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 emergence of Bitcoin as the official currency will cause great financial damage to many states.

“Cryptocurrency a priori cannot become the official currency, 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 spoke about the Facebook cryptocurrency initiative – Libra. According to him, this is a smart plan aimed at attracting users to the company’s products.

“The development of Libra should have a negative effect on Bitcoin, because it will increase the supply of cryptocurrency substitutes. But there is a positive point: people realize that digital assets are becoming more legitimate, and they will start entering this industry again, ”said Xie.

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 it.

“Wall Street organized the Chicago futures market. If the price rises too high, they will lower it until people in East Asia panic and decide to leave the tool, says Xie. – In fact, their profits are 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 cryptocurrency – the main source of income. Residents of East Asia each year lose about $ 100 billion in gambling. Cryptocurrencies absorb this business. After some time, you will be able to contemplate how real casinos will close. ”