At CNBC Panel Discussion in Davos, Insiders Have Gloomy Forecasts: “Bitcoin Will Go to Zero,” Serves a Role as Store of Value

Jeff Schumacher is the founder of BCG Digital Ventures, an early-stage growth platform that invests in innovative startups that are building disruptive solutions — including working on decentralized “Cloud 3.0” solution Dfinity. Despite being invested in the space, Schumacher predicts that “Bitcoin will go to zero.” Conversely,  Schumacher sees potential in the several other use cases blockchain provides for. 

The market is currently attempting to break out of its bear run, with Bitcoin sitting at roughly $3,500. Though investors are wary of Bitcoin dropping below this support line, which has been holding for some time, Schumacher’s statement is a much more stark analysis of Bitcoin’s future, which some confidently say will only go up, given enough time.

I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything.

Schumacher made the statement in a CNBC panel discussion at the Sanctuary in Davos, riffing off a similar remark he made last year at a talk in Seoul. Schumacher said that “between 95 to 99 percent of digital coins will be worth nothing within 18 months,” in addition to making bold statements such as “Uber will eventually go away.”

Panelists Believe That Blockchain, Not Bitcoin, Is the Real Innovation

Sharing the same opinion as many other investors in the space, Schumacher believes that the underlying technology holds more potential than Bitcoin itself. Fellow panel Glenn Hutchins shares this view that Bitcoin may have more purpose as a store of value than as a currency.

I am much less interested in investing around bitcoin as a currency unit or a currency equivalent, or even the blockchain as an accounting ledger. I am thinking much more about the protocols. In other words, what is the underlying protocol going to do as a consequence of which, which tokens are valuable or not.

Also on the panel was Ripple CEO Brad Garlinghouse, who is known for his bullish view on Distributed Ledger Technologies (DLTs) disrupting the financial industry. Ripple has already roped in over 200 partners for its network and is riding on a high coming in from 2018.

Another common theme in the discussion was the timeframe in which the technology would mature and find itself in everyday use. The technology is indeed some way off from being present in everyday activities. Schumacher sees this happening in 3 years (similarly predicted by BitPay’s CEO), and the panelists generally see the technology being successful when “something of value comes out of it…[whereas users] do not care what the underlying technology is.”