"Bitcoin's price is not likely to fall to zero": report by St. Louis Federal Bank

17 Jan, 2019 | Updated: 17 Jan, 2019
by David Robb
Bitcoin
Bitcoin's price is not likely to fall to zero: report by St. Louis Federal Bank

The Federal Reserve Bank of St. Louis, Missouri, has recently released a report with an analysis of the future Bitcoin (BTC) price. It claims that the BTC price is "not likely to fall to zero".

Despite not foretelling the end of Bitcoin, as many figures from conventional finance often do, the report doesn't adopt a particularly bullish position either. David Andolfatto and Andrew Spewak, the authors of 'Whither the price of Bitcoin', believe that the "future price path is more likely to remain bounded between" these two extremes.

It also claims that altcoins will play a major role in the future price activity of the leading crypto. As other tokens continue to flood the market, these are likely to exert some serious downward pressure on the price of Bitcoin, as has already happened so far.

The analysis also goes against the conventional wisdom of many in the banking industry by insisting that BTC does have intrinsic worth. It claims that the Bitcoin network is effectively a database management system, and that these "can have a fundamental value if they are tailored to meet the needs of a given constituency".

In the report's conclusion, the authors are hesitant to give a definite prediction one way or the other, merely pointing out that "the price dynamic of an unbacked asset is likely to be highly volatile and inherently unforecastable". 

Read more: Will Bitcoin recover in 2019?8 long-term Bitcoin price predictions by experts

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