#The Future of Bitcoin

Bitcoin’s value has on balance risen substantially in recent months, despite large fluctuations. These
fluctuations have attracted much attention from various sides. It appears that opinions on the future of this
cryptocurrency are strongly divided. Most economists often take a different view on Bitcoin than people in the
crypto world. The latter group emphasize the innovation that Bitcoin (more specifically the blockchain)
brings, while economists often see Bitcoin as a bubble, with characteristics of a Ponzi scheme and underpinned
by spectacular, but poorly founded economic claims. Most people have above all many questions. In this Policy
Note, which has the structure of a Q&A-session, I will discuss the various arguments as objectively as I possibly
can.
My conclusion: Bitcoin is not the money of the future and certainly not a future ‘world money’. If it survives,
which it may, it will probably be as a high risk asset class. As such, it may strongly increase in value in the
future, but it could just as easily go the other way and end up valueless. The buyer beware.

By Wim Boonstra
RaboResearch and Vrije Universiteit Amsterdam