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A new year, a new high: Bitcoin crosses $33,000 but can it reverse course to $0?

FOMO aside, and while widespread adoption explains the current trend, can BTC drastically drop in value, and even go down to $0?

99bitcoins’ Obituaries column currently has over 380 recorded instances of Bitcoin “dying.” Bitcoin being banned by all world governments could potentially render it illegal to own or use Bitcoin’s algorithm, currently one of the most secure on the planet, may one day be breakable by quantum computers

On Saturday, Bitcoin (BTC) passed $33,000 in value, according to CoinDesk, increasing over 10% in value in the past 24 hours and boasting a $605 billion market cap.

Price at publishing date on Sunday, January 3, stood at $33,795.

The cryptocurrency closed out the year with an increase of more than 300%, as per CoinDesk.

In a COVID-19 marred March 2020, Bitcoin lost 50% of its value in two days, dropping to below $4,000. 

FOMO aside, and while widespread adoption explains the current trend, can BTC drastically drop in value, and even go down to $0?

Read: Where is Bitcoin’s price heading and when is the selloff happening?

Opinions on a worthless BTC

Some BTC detractors have long argued that it’s only a matter of time before it collapses back to zero.

Former Bitcoin Cash proponent Calvin Ayre in July stated that Bitcoin is worthless, while American business tycoon Warren Buffett has frequently lambasted Bitcoin, and has told CNBC that all cryptocurrencies (Bitcoin included) are worthless.

Gold bug Peter Schiff remains among those who believe that Bitcoin is ultimately going down, while gold will win out.

One of the industry’s most faithful non-technical monitors of Bitcoin sentiment, 99bitcoins’ Obituaries column, currently has over 380 recorded instances of Bitcoin “dying.”

Though extremely unlikely (in the near term), it is technically possible for Bitcoin’s price to zero out.

A 2018 report by two Yale economists, Yukun Liu and Aleh Tsyvinski, titled ‘Risks and Returns of Cryptocurrency, places the odds of Bitcoin crashing to zero at around 0.4%, a nearly impossible task.

Others argue that Bitcoin will eventually crash to zero because it lacks intrinsic value

What BTC lacks in intrinsic value it compensates with consumer confidence and mathematics.   

Galaxy Digital founder and popularly known crypto investor, Mike Novogratz said in a recent interview aired on CNN, that it was most almost impossible for Bitcoin to trade back to zero value, advising investors to allocate about 1% of their net worth to Bitcoin and other crypto assets, based on their price volatility.

“I think a new investor could put 5% into Bitcoin,” said Novogratz. “Bitcoin’s not going back to zero […] It could certainly trade back to $14,000 — you could lose 30-40%, but you’re not losing 80-90% of your money.”

Read: Remote work, Bitcoin, IoT, and 5G are great news for cybercriminals in 2021

What can make it crash to $0?

Remember, even with the meteoric rise of Bitcoin, its over $600 bn market cap is close to insignificant when compared to gold’s approximately $8 trillion or even USD’s $75 trn.

A Bitcoin wipeout would not send markets into panic.  

Here’s a scenario.

Bitcoin being banned by all world governments could potentially render it illegal to own or use. Simply put, death by regulation. Governments could make everything even remotely linked to a non-sovereign cryptocurrency illegal and impose stiff penalties for anyone using, holding, or working with it.

This would also require taking down the entire Bitcoin network, rendering all nodes offline and making it impossible to set up new ones.  

Another possibility is that Bitcoin might simply be superseded by a better cryptocurrency or a similar alternative payment system, rendering it obsolete.

Also, if people lose confidence in Bitcoin it would simply be a total collapse of the exchange rate to dollars or other currencies.

A technical collapse could bring the network down, despite the well-designed decentralized system having close to 12 nearly trouble-free years of operation.

Bitcoin’s network is incredibly secure, to a degree that is easy to demonstrate in mathematical terms, but close to impossible using mere words.

Still, any failure in the network would be instantly devastating, at least in theory.

Another possibility is a deliberate 51% attack where a rogue player takes control of the network through sheer computing power. 

Finally, yet another risk is that Bitcoin’s algorithm, currently one of the most secure on the planet, is no longer unbreakable, perhaps because of a new breakthrough in Quantum computing. 

BTC will never, ever go to $0

Bitcoin price will now never officially go to $0. Here’s why.

A massive 18.52 million BTC buy order on Bitfinex will save Bitcoin from dropping to $0, thanks to Alistair Milne.

Bitcoin can crash hard, but not so hard that it ends up costing $0 because one man is going to buy all of it.

In tweets last July 9, entrepreneur and outspoken Bitcoin bull Milne revealed that he had placed an order for 18.52 million BTC ($174 billion), more than the current supply, on exchange Bitfinex.

Milne said: “I’m buying all the Bitcoin at 1 cent.”

“I hereby confirm that #Bitcoin will never go to zero (at least on @bitfinex),” he wrote.