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The price of bitcoin has fallen from almost $70,000 to less than $17,000 per bitcoin at the end of 2021 (although a viral memecoin made the rounds in the new year).
Now, with serious survival fears swirling around the world’s biggest bitcoin and crypto companies, geopolitical strategist Peter Zeihan has described how the price of bitcoin could fall below zero.
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“Bitcoin serves no purpose, it’s not a store of value, it’s not a medium of exchange, and as we’ve seen, if you want to decentralize outside of government control, it’s a haven for fraud,” author Zeihan Random superpowerThis was reported by podcaster Joe Rogan.
“[Crypto] Now it’s in the process of going to zero, except for bitcoin, which will probably be negative, because if we’re going to a world with a carbon tax, you have to consider the energy to produce it first.”
Zeihan said bitcoin is “now starting to get a decent price.” Bitcoin’s price “has another $17,000 to go. This product has no intrinsic value.”
The bitcoin blockchain, a distributed digital ledger, is maintained by individuals called miners, who use powerful, power-hungry computers to secure the network in exchange for bitcoins.
After China kicked out bitcoin miners in 2021, the US became the world’s largest bitcoin mining country, accounting for about 38% of the bitcoin hashrate according to the Cambridge Bitcoin Electricity Consumption Index.
According to Digiconomist’s Bitcoin Energy Consumption Index, bitcoin mining uses an eye-watering amount of energy to run and cool computers, consuming as much electricity as all of Sweden in 2022.
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While renewable energy sources account for nearly 40% of bitcoin’s energy consumption, the Bitcoin Energy Consumption Index puts the bitcoin network’s carbon footprint on par with Hong Kong.
In recent years, countries around the world have introduced carbon taxes as they try to reduce CO2 emissions. Last June, Danish lawmakers passed the highest corporate carbon tax in Europe. However, the US does not have a national carbon tax, an idea the Biden administration considers politically risky and difficult to pass through Congress.
Despite the fall in the price of bitcoin over the past year, many are confident that the price will finally reveal when it will finally buy bitcoin again with billionaire Shark Tank star and bitcoin critic-turned-crypto-investor Mark Cuban.
“Bitcoin has become an ideology,” Zeihan said. “The people who really love Bitcoin are convinced that it’s the currency of the future, decentralized ledgers are the way to go, anything run by a government entity is negative and it’s better if it’s done by the private sector. but that’s not how currency works.”
The bitcoin shortage, which compares it to digital gold with a fixed supply of around 21 million bitcoins, has been cited by bitcoin bulls for its superiority over government-backed so-called fiat currencies that can be created by central banks.
“One of the craziest things about Bitcoin is that there is never more than X number of bitcoins. [because] by default, that means it can’t be used for trade,” Zeihan said. “The whole idea of economic activity is to have expansion, which means you need more currency to fuel and manage that expansion. If the currency is pegged to a certain number, you get monetary inflation, and that’s one of the fastest ways to destroy an economic model.”