Magellan co-founder and veteran investor Hamish Douglass has issued a stark warning that popular cryptocurrency Bitcoin could be heading to zero dollars. Douglass’ warning coincides with his annual letter to Magellan investors.
“I predict all these forms of cryptocurrencies that are not backed by central banks or backed by assets will ultimately go to zero. I can’t tell you when it will happen, but it’s inevitable that it will go to zero,” he told The Australian.
Prior to the recent crash, which has fallen by more than half of its April 2021 value in recent months, Bitcoin had seen massive growth over the last half a decade. At its peak earlier this year, the coin was up nearly 50-fold from its value five years ago.
At the time of publishing, Bitcoin is still up more than 200 per cent for the year, according to Coinbase.
But while some investors see the current downturn as a blip in the radar that will eventually pass, Douglass is convinced the bubble will burst and the value of Bitcoin will be completely obliterated.
“Cryptocurrencies, I have to say, are one of the greatest irrationalities I’ve seen in a very, very, long period of time because of the cult-like following it has behind it and the scale that is behind it,” Douglass told the AFR.
“There are millions and millions of people participating. Some of the people, they’ve never invested before and the only bandwagon they’ve ever got on is the cryptocurrency bandwagon and it’s almost like a religion.”
Interestingly, Douglass’ comments come just days after Ethereum co-founder and early Bitcoin adopter Anthony Di Iorio announced he was quitting cryptocurrency for good, citing that cryptocurrency is “not what the world needs.”
Di Iorio told Bloomberg he wants “to diversify to not being a crypto guy, but being a guy tackling complex problems. I will incorporate crypto when needed, but a lot of times, it’s not.”
However, not everyone holds such negative views about Bitcoin, with Thomson Reuters technologist and futurist Joseph Raczynski predicting the coin will overtake the US dollar by 2050.
“Some countries will leverage bitcoin as their primary currency of choice,” Raczynski said, adding he thinks bitcoin’s value will exceed $150,000 by 2050. “With fixed circulation, ease of transfer, it will serve them well to move to a ‘bankless’ model inherent in this ecosystem.”
Meanwhile, University of Western Australia associate professor Lee Smales warns not to expect Bitcoin to become a dominate currency.
“Ultimately I think bitcoin (and many other cryptocurrency assets) will lose out to central bank digital currencies—many of which will be live by the end of the decade,” Smales told Forbes.