MiniFlokiADA is a crypto project that helps users earn passive income and NFTs from gaming and Elon Musk’s tweets. Its official launch took place on October 22, 2021. When he doesn’t influence Bitcoin’s ups and downs, Elon Musk unwittingly inspires countless projects to surface on the blockchain. Also, it doesn’t take much for Tesla’s CEO to trigger an avalanche of crypto projects. For instance, his latest pet friend, a Shiba Inu he calls Floki, has galvanized the community into launching…
There’s no doubt that bitcoin is the most valuable crypto asset of our day. According to coinmarketcap, when writing this, the price of Bitcoin was around $31k. Even more, the market cap was almost $600 billion, twice the value of the second largest crypto asset. Bitcoins market capitalization is larger than the value of the first ten altcoins combined.
Expert analysts have predicted that in the future, the prices of bitcoin could increase to about $300k. Looking at the past market charts of the coin, it’s pretty clear that the experts’ expert analysis could be valid. However, it’s also possible that the prices of Bitcoin could reduce to zero in the future. This guide looks into scenarios that bitcoin could tank to zero.
Government Interference-Global Bitcoin Bans
One of the main issues that could drive the prices of Bitcoin to zero is a worsening regulatory environment. The governmental interference with the daily crypto and bitcoin-related business can vastly affect the prices of Bitcoin, and in extreme cases, the price may fall to zero. Are not cryptos designed to be exclusively free from regulations from the governments? How can the government interfere with crypto-related businesses?
The primary idea for the launch of Bitcoin was providing a currency that operates entirely free from any controls or bounds by the government. However, one thing that the crypto world and the blockchain cannot fully hedge against is bans.
Today, there are already over a dozen countries globally that have set severe restrictions or even banned crypto and bitcoin in their entirety. Among these countries include Bolivia, Kyrgyzstan, Bangladesh, Iran, and many more. Even Nigeria, a country leading the race for crypto earlier this year, set stringent policies against crypto.
Bans in many countries, especially great economies, can have dire consequences for crypto. For example, China’s setting of crypto regulations recently led to the tanking of BTC prices. If the same happens in other countries, the price of bitcoin may fall to zero meaning the death of BTC.
The Full Acceptance of Stablecoins and CBDCs
Another big threat to the existence of the Bitcoin currency is the rise of stablecoins. It is believed that with the increase in the adoption of these currencies, Bitcoin may lack the use case as a currency. What are stablecoins?
Stablecoins are a type of crypto asset introduced in 2014 with the launch of USDT, a coin perfect for wealth storage. Another underlying asset with good value backs these coins. Some of the backing assets may include gold, silver, platinum, another strong coin, or the fiat currency in the bank like USD, Yuan, etc.
These backing assets selected are the most stable with minimal volatilities and have high demand and use cases. Many governments globally are now looking into stablecoins, with some like China being miles ahead in introducing digital yuan. In the future, more countries will look into the CBDC and stablecoin creation world. Why?
Stablecoin, unlike Bitcoin, is easy to transact and can help the government get full market transparency. In addition, these details collected will help the government forecast future successes and failures of particular organizations.
Once more countries institute their digital currencies, bitcoin will be of no use as a currency. It’s doubtful that people will use external currencies like Bitcoin to have their native, more reliable currency.
By lacking the currency status, bitcoin will also fail as an investment asset, and in the long run, the coin will reduce in price to zero. Therefore once more countries adopt CBDCs, Bitcoin will likely lose value completely.
Complete Lacking Institutional Support
The lack of institutional support of crypto has always been a major drawback against bitcoin and crypto. Although there are currently several institutions backing bitcoin, things could at any point turn.
Almost every crypto enthusiast recalls that just in February 2021, the prices of Bitcoin shot up because of the institutional support Bitcoin received from Tesla. However, things turned sour when Tesla and Elon musk decided to drop Bitcoin for environmental reasons, and Elon instead focused on pumping dogecoin.
Immediately after dropping Bitcoin, the assets value vastly dropped to merely half of the value two months later. So what if all banking institutions, Paypal, and investors currently working with Bitcoin decide to drop Bitcoin? The impact would be dire for the currency, driving its value to zero.
If The Network Faces Security Risks
Finally, the price of Bitcoin could go to zero in case of a severe security breach or a series of security breaches. As already seen, Bitcoin has been used multiple times as a scamming asset that has consumed millions of users. What if bitcoin as a currency suffered from severe attacks that affect the values of assets in individual users’ wallets?
Generally, if the network suffered a vast 51% attack, a colossal hack, or a massive pump and dump scheme, investors will be worried about investing in it, effectively dropping the coin. A sudden drop in value because of security issues could start a cycle that could lead the value of Bitcoin to zero.
Bitcoin is the best crypto asset today and one of the best prospects in the entire crypto world. First, however, investors must understand the possible scenarios where its price could drop to zero. To begin with, the increase in government interference in the future could drive Bitcoins prices to tank.
Additionally, there is a sudden rise in stablecoins, and it’s plausible that in the future, more governments will look into CBDCs. Thus, replacing Bitcoin with national digital assets could also drive the price of Bitcoin to zero. Furthermore, the lack of institutional support and security could drive the network’s value to zero.