HomeMarket NewsCurrency NewsBitcoin nears $1 trillion market cap: Sceptic Kenneth Rogoff likens cryptocurrency as asset class to modern art

Bitcoin nears $1 trillion market cap: Sceptic Kenneth Rogoff likens cryptocurrency as asset class to modern art

Rogoff says central banks are eying bitcoin, whose value hit a high of $52,797 on February 19, and are exploring options on how to treat the cryptocurrency

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By CNBCTV18.com February 19, 2021, 8:39:39 PM IST (Updated)

Bitcoin nears $1 trillion market cap: Sceptic Kenneth Rogoff likens cryptocurrency as asset class to modern art
American economist Kenneth Rogoff has yet again cast doubt on the success of bitcoin yet again and said that if there is no final use case for the cryptocurrency and the bubble will ultimately pop. Nonetheless, the cryptocurrency neared the $1 trillion-mark in terms of market valuation on February 19, which is a little over Rs 72 lakh crore.


Since the beginning of the year, Bitcoin has attracted a lot of interest from many mainstream investors. It has captivated billionaire Elon Musk, and hedge-fund moguls such as Alan Howard and Paul Tudor Jones among others worldwide.

The cryptocurrency is grabbing a lot of attention after electric car maker Tesla announced on February 8 that it had invested around Rs 10,877 crore ($1.5 billion) in bitcoin and would begin accepting payments for its cars and other products with the cryptocurrency in the near future.

Rogoff said that every central bank has its eyes on bitcoin, whose value hit a high of $52,797 on February 19, and is exploring options on how to treat the cryptocurrency. He said zero interest rates "produce funny asset valuations" and likened Bitcoin's position as an asset class to modern art.

This year so far, the cryptocurrency has surged roughly 78 percent and added over $415 billion in value, according to Bloomberg data, even as institutional interest ramps up. The Harvard professor believes that regulating bitcoin won't be difficult, but there seems to be "hesitation to move quickly" towards it considering that governments need to "retain control over the unit of account which is the currency". He also asserted that rules that govern money laundering should apply to cryptocurrencies.

Referring to Tesla's decision to accept Bitcoin payments for the sale of cars, he said the company would be required to fulfil KYC obligations.
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