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This Chinese Scholar Sees A Rosy Future Ahead For Bitcoin

Has bitcoin fad started to fade away? Its price hit a 5-week low of $7,753 on Thursday following a series of blows.And the largest cryptocurrency by market cap was traded in a relatively narrow range, between $8,500 and $11,300 last month.It looks pretty boring.

However, a Chinese scholar sees a rosy future ahead for bitcoin.

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Chen jianqi, deputy director and professor of the World Economic Research Institute of the Party School of the CPC, said on March 12 in a blockchain-themed event that bitcoin has the potential to become a global currency like China’s Yuan and U.S. dollar, and in the long term, its price may hit a new record high above $400,000. But in the short term, bitcoin may still hover around $6,000-$7,500.

“Bitcoin is able to play the role of ‘universal equivalent’, and even has the potential to become a  global currency. In the future, the cryptocurrency will have to surpass some significant obstacles and experience an uncertain time which is not unusual for new things. So if bitcoin continues to develop, its price will fluctuate wildly depending on changes in the usage and supply. ” Chen said.

He believed if bitcoin is widely accepted by public, we will see a spike in its value.By comparing global reserves of bitcoin with that of other international payment currencies, Chen made his prediction of bitcoin price as follows:

In the short term, bitcoin is expected to evolve from lines of computer code to a quasi global currency, and bitcoin’s share in the international reserves may rise to nearly 1%. Thus the reasonable price of bitcoin may range from $6,000 to $7,500.

In the medium term, bitcoin’s share of international reserves may rise to the level of the Japanese Yen. In this case, bitcoin price will surge to between $23,000 and $ 30,000 .

In the long run, if bitcoin has the opportunity to become the most important international reserve currency, its price may touch a record high above $400,000.

From his perspective, China’s central bank will not ban bitcoin completely because bitcoin does not affect the exchange rate between RMB and other fiat currencies,and it has weak implications on China’s foreign exchange reserves and monetary policy.The assumption, however, is based on the fact that bitcoin is a commodity rather than a currency.

“If bitcoin is recognized as a currency in the future, then it will compete with other state-backed currencies including China’s yuan, and will exert an inevitable impact on the financial market.”

Blockchain has been garnering mainstream attention as bitcoin fever gets hotter.Professor Chen warned investors that do not pour money into bitcoin-type blockchains carelessly, because these new things are still in infancy with a lot of uncertainty. And the development of blockchains still face several challenges.

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