Bitcoin’s price has taken an 11.84% hit the past week on bearish news, such as the US Securities and Exchange Commission postponing their decision on a bitcoin ETF filed by investment firm VanEck and blockchain technology company SolidX, but what are the chances that the digital currency falls from its current price of $6,498.12 (as of 4:15 p.m. ET) to zero? Two Yale University economists, Yukun Liu and Aleh Tsyvinski, calculated the probability of such an occurrence.
“The current implied daily disaster probability is about 0.4 percent for Bitcoin, 0.6 percent for Ripple, and 0.3 percent for Ethereum,” according to the report by Tsyvinski and Liu.
While 0.4% might seem miniscule, it is relatively large in comparison to its fiat counterparts, such as the Euro, Australian dollar and the Canadian dollar. The chances of the Euro reaching zero worth is 0.009%, the Australian dollar has a .003% chance and the Canadian dollar has a .005% chance.
“On one hand it sounds small, on the other hand, it is still orders of magnitude larger than the probability that [a traditional currency]is going to become worthless,” Tsyvinski says. “So you can take the glass half full or the glass half empty.”
Meanwhile, Bitcoin prices have fallen as news broke that the decision for the join venture of VanEck and SolidX to launch a bitcoin ETF will delayed by the SEC until the end of September. According to the SEC, “the Commission, pursuant to Section 19(b)(2) of the Act designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
Nonetheless, some analysts are viewing the recent decline as a retrace back to a consolidation price of $6,000 or below, which the digital currency breached on June 24. After reaching a high of $20,000 last December, the price of Bitcoin has fallen unceremoniously. Last month’s rally past the $8,000 mark came as a result of a spate of news regarding interest from investment giant BlackRock, as well as the Bitcoin ETF from VanEck and SolidX.
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