Nobel Prize winner Joseph Stiglitz has made a statement that will be widely lauded and criticised by the parties on each side of the Bitcoin fence. He said that the cryptocurrency should be banned, based on analysis that claims the market is mainly driven by Bitcoin’s potential to upend certain government agencies.
His rant went on to claim that the Bitcoin market will rise, then fall dramatically, which will hurt too many investors. And he said that Bitcoin serves no ‘socially useful function’.
Is Bitcoin the only culprit?
By the logic Dr Stiglitz applies, he may want to consider banning the famed FANG (Facebook, Apple, Netflix, Google) stocks, which faced far greater losses than Bitcoin did on its recent price decline. In fact, while Bitcoin was losing approximately $3 billion in market cap, Fang stocks lost around $60 billion – a full 20 times as much! If the primary goal is consumer protection, the greater risk is in FANG stocks.
Of course, Dr Stiglitz comes from a good place with his warnings, extreme though they might be. But when a new presence enters the equation, fear and excitement are inevitabilities that both have their place. No-one would recommend investors going in blind with any transaction, but assuming that certain entities are simply bad news is an unhealthy attitude for freedom to trade.
When it comes down to it, regardless of what economists say, Bitcoin is virtually impossible to ban by its very nature. Rather, governments should simply accept the cryptocurrency and regulate its trade rationally and reasonably. The founder of Havven, Kain Warwick, said that it is “irrelevant” whether any particular individual opines that Bitcoin should be banned. He says that one of Bitcoin’s major strengths is that, in practice, it is “not able to be banned”.
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