Kenneth Rogoff Admits Misjudging Bitcoin Price in 2018 Prediction

TLDR

• Harvard economist Kenneth Rogoff previously predicted Bitcoin would crash to $100 before hitting $100,000.

• Bitcoin surpassed $100,000 in December 2024, rising over 1,000% since Rogoff’s prediction.

• Rogoff admitted he underestimated Bitcoin’s role in competing with fiat currencies in the global economy.

• Critics argue that Rogoff failed to grasp Bitcoin’s decentralized nature, which enabled its success at scale.

Harvard economist Kenneth Rogoff, known for his bearish stance on Bitcoin, recently admitted that he was wrong in his 2018 prediction. Rogoff had suggested that Bitcoin was more likely to crash to $100 before reaching $100,000. However, the cryptocurrency surpassed the $100,000 mark in December 2024, defying his earlier forecast and showing an impressive rise of over 1,000% since then.

Rogoff, who is also a former chief economist at the International Monetary Fund (IMF), reflected on his error during a post on X, acknowledging that his views had been overly cautious about Bitcoin’s potential. “What did I miss?” he asked, recognizing the shifts in the market that he had failed to predict.

Key Factors Rogoff Overlooked in Bitcoin 2018 Prediction

Rogoff’s 2018 prediction centered around the belief that government regulation would cause Bitcoin’s price to plummet. However, in the years since, Bitcoin has managed to thrive despite regulatory scrutiny. According to Rogoff, he was overly optimistic about the U.S. government’s willingness to create a reasonable regulatory framework for cryptocurrency.

He also missed Bitcoin’s growing role in competing with fiat currencies, particularly in countries where local currencies had been heavily devalued. Rogoff admitted that he did not foresee how Bitcoin could become a preferred medium of exchange in the global underground economy.

Bitcoin as a Hedge Against Inflation and Fiat Currency Competition

Bitcoin has increasingly become a hedge against inflation, especially in countries experiencing severe currency devaluation. While the economist had originally seen Bitcoin as a speculative asset, he now recognizes its use as a store of value.

Despite the illicit activities often linked to Bitcoin, such as money laundering, it still constitutes a small fraction of the total money laundered worldwide. This recognition shows that Bitcoin’s real-world applications have evolved, and its role as an alternative financial asset is becoming more apparent.

Crypto Critics Respond to Rogoff’s Change of View

Rogoff’s admission of being wrong about Bitcoin sparked responses from critics in the crypto community. Matt Hougan, chief investment officer at Bitwise, pointed out that Rogoff had failed to recognize that Bitcoin was a decentralized project that drew its strength from people rather than centralized institutions.

Others, like digital asset researcher David Lawant, expressed their gratitude for Rogoff’s earlier writings, claiming that his book, “The Curse of Cash,” had actually pushed them toward Bitcoin.

Matthew Sigel, head of digital assets research at VanEck, ranked Rogoff among the loudest critics of Bitcoin. Sigel noted that Rogoff had prematurely declared Bitcoin’s failure without fully understanding the changing dynamics of the financial system.

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