Bitcoin crash not a foregone conclusion

During a recent UBS forum, Monetary Authority of Singapore (MAS) managing director Ravi Menon made a statement which suggested that cryptocurrencies were headed for a crash (MAS chief not keen on digital currencies for the public; Jan 16).

He said: "I do hope that when that fever has gone away, when the crash has happened, it will not undermine the much deeper and more meaningful technologies associated with digital currencies and blockchains."

This remark made me uncomfortable. It gives one the impression that a cryptocurrency crash is a foregone conclusion.

It is proper for a regulatory body like the MAS to warn the public about speculating in cryptocurrencies.

In the course of its brief history, bitcoin has undergone a number of drastic and substantial price corrections.

Nonetheless, bitcoin has continued to reach new highs after each correction.

Although it is plausible that the cryptocurrency could crash, given that it has already risen by so much, there is also the possibility that it could continue to rise further.

Indeed, it seems the public's appetite for bitcoin has not waned (Machines sold out of bitcoin as prices drop below US$10k; Jan 19).

Chan Yeow Chuan

A version of this article appeared in the print edition of The Straits Times on January 22, 2018, with the headline 'Bitcoin crash not a foregone conclusion'. Print Edition | Subscribe