Could Bitcoin collapse?

Ben McKenzie has released a documentary calling cryptocurrencies "stupid," four years after labeling them the largest Ponzi scheme in history. While McKenzie is vocal about his desire to take down cryptocurrency, local supporters suggest that some could see their value go to zero. Cryptocurrencies are decentralized digital currencies used for transactions or as investment assets.

Bitcoin, the most well-known currency, has seen its price fall from over NZ$210,000 to NZ$128,489. Ethereum and Ripple have also experienced significant drops in value. The values fluctuate due to lack of government backing and supply and demand factors. Rupert Carlyon, founder of Koura, believes Bitcoin could fall to zero, though he doubts it.

Other cryptocurrencies, such as Ethereum and Ripple, have also shown potential to drop to zero, especially if large institutional investors decide to sell. The recent value drop may be attributed to investors moving their funds to AI stocks. Some commentators suggest Bitcoin's recent decline is due to people investing in cryptocurrencies withdrawing money to invest in AI stocks.

University of Auckland professor Alex Sims warns that a significant shift in value could occur if large institutional investors sell their holdings. Carlyon notes that Bitcoin has become a "gold standard" in the crypto industry, which makes it difficult to predict a complete collapse. However, he acknowledges that stablecoins, linked to assets like the US or NZ dollar, could replace Bitcoin as a means of holding value outside the banking system.

The possibility of quantum computing breaking encryption and enabling theft of private keys is another scenario that could lead to cryptocurrencies' downfall. Carlyon highlights that there is no clear trend for Bitcoin over the past six to twelve months, and stablecoins may be replacing Bitcoin as a means to hold value outside the banking system.