The Real Price of Bitcoin could be $0

On the morning of December 27, 2017, bitcoin was worth slightly more than $15,400. But Morgan Stanley analyst James Faucette said the real price of bitcoin might be $0.

Business Insider reported that Morgan Stanley executive director James Faucette has reportedly sent a memo to his group’s clients that suggested the true value of Bitcoin was $0.00. Faucette’s team of analysts argue that not only is Bitcoin hard to equate to real world money, less online retailers are accepting the cryptocurrency as payment. “If nobody accepts the technology for payment then the value would be 0,” Faucette said in his analysis.

In a release called “Bitcoin decrypted,” Morgan Stanley points out that it can not be valued like a currency because there is no interest rate associated with it. Faucette adds that unlike buying digital gold, Bitcoin has no intrinsic use like gold has in electronics and jewelry.

Faucette concluded that bitcoin can’t be considered a true currency, like the U.S. dollar or Euro, because the cryptocurrency doesn’t have an associated interest rate. He did concede it shared some similarities with gold, but unlike the precious metal, said bitcoin had no intrinsic value like gold does as jewelry.

Despite its popularity, many are wary that the bitcoin bubble will eventually pop and its high prices collapse. In September 2017, JP Morgan CEO James Dimon called bitcoin a “fraud” and claimed that he would fire any trader who was found to be trading in it. In early December 2017, one of Bitcoin’s co-founders sold all his bitcoin.

While Faucette’s conclusion is a bit grim, it’s important to remember that bitcoin is valuable in the sense that it can still be exchanged for more mainstream currency.

While economic forecasters continue to assume the worst for Bitcoin’s future, the eight-year-old currency has seen its value skyrocket this year. The digital currency surged to nearly $20,000 per unit in mid-December, before falling back to around $15,000 on Christmas.