Bitcoin has potential for enormous growth, but this growth is unstable, owing to which there are significant risks of a crash, according to deputies of the Russian Duma.
Bitcoin scaled new heights this week, and surged past a record-breaking $7000. The spike marks an increase of more than sevenfold since the start of the year, when Bitcoin’s price was around $1000. While the price surge has validated supporters of cryptocurrency, the significant increase has also given rise to concerns about Bitcoin’s volatility.
During an interview with RT, Chairman of the State Duma Financial Market Committee, Anatoly Aksakov, said the market for the digital currency was definitely bullish at present, with plenty of potential for further growth.
“It has not reached its growth limit; the pyramid has not yet inflated so much as to burst. It will be pumped more and more ... The price could double or even triple, it may even rise to $20,000.”
Aksakov claimed the price would continue to rise owing to “active discussions” about Bitcoin in the media, which tout the cryptocurrency’s record-breaking price surges and high profitability. It is owing to this hype, according to Aksakov, that “hotheads” looking for investment opportunities, “jump into the deep end”; this state of affairs will continue, he said, until some “critical situation” brings Bitcoin crashing down.
During an interview to Regnum, Sergey Zhigarev, head of the State Duma Committee on Economic Policy, Industry, Innovative Development and Entrepreneurship, voiced similar sentiments. Zhigarev described Bitcoin as a bubble, saying that while there was no question about Bitcoin’s potential for future growth, the grounds and stability of this growth were both in question, making it a risky investment.
“Bitcoin can exceed $20,000, and even $40,000, or maybe tomorrow it will collapse to five dollars and one cent. There is nothing, no assets behind Bitcoin, it is only about speculative interest, so people who play with it play at their own peril.”
Futures exchange CME Group recently announced a plan to launch Bitcoin futures at the end of 2017, a move which could lend a great deal of legitimacy to the controversial digital currency.
However, the effect of this announcement on governments and banks remains to be seen, as both groups have displayed suspicion and unwillingness to take Bitcoin seriously. Russia is one among many countries trying to bring cryptocurrencies under government control – last month, President Vladimir Putin issued orders for the regulation of cryptocurrencies and ICOs, shortly after he called digital currencies risky. In addition, Russia has also announced plans to launch its own virtual currency – the ‘CryptoRuble’.