Bitcoin Is Not Serving Well as a Medium of Exchange, Says Economist

Eswar Prasad, a Senior Professor of International Trade Policy at Cornell University, recently warned about the risks associated with Bitcoin. According to him, the world’s most valuable digital asset may not last that much longer.

In an interview with CNBC’s Squawk Box Europe, the economist said that BTC is not serving well as a medium of exchange. He believes that the recent surge in the adoption of cryptocurrency assets has pushed central banks to launch the digital version of their own currencies.

While Prasad showed his concerns regarding BTC, he supported the use of blockchain technology. Prasad is one of the well-known economists in the world. He received his PhD from the University of Chicago in 1992.

“Given that bitcoin is not serving well as a medium of exchange, I don’t think it’s going to have any fundamental value other than whatever investor’s faith leads it to have. Bitcoin’s use of the blockchain technology is not very efficient,” Prasad said in his recent interview with CNBC.

Bitcoin in 2021

BTC started this year at a price level of almost $29,000. The crypto asset is up by approximately 80% this year. However, the latest correction has caused a major issue for the short-term holders of the most dominant digital currency. A large supply of Bitcoin is now facing losses as the price is struggling near $50,000.

“As the recent correction from the ATH progressed lower, it put an increasingly large proportion of supply into an unrealized loss. Coins have been spent and redistributed through this time, which reshuffles the UTXO realized price distribution (URPD). At the time of writing, approximately 3.7M BTC, representing 19.5% of the supply is underwater. On a more constructive note, a reasonably large volume cluster has been established in this week's price range, equivalent to 2.214M BTC (11.7% of supply),” Glassnode mentioned.