Bitcoin has gone up a great deal this year. It is near $2800 as of this writing. But according to Morgan Stanley it will continue to rise only if it is regulated.
The idea is that investors will have to give up some of its autonomy in order to profit further.
Specifically the bank has gotten many phone calls about investing in cryptocurrencies, But believes that “governmental acceptance would be required for this to further accelerate, the price of which is regulation.”
This is mainly because much big money is bound up with government itself. In other words, government buys and sells government bonds in order to retain solvency.
Government will not issue bonds without controlling the money that back the bonds. Thus bitcoin will have to give up control in order for its investors to participate.
Of course no one controls bitcoin, so in some way, bitcoin will have to be re-jiggered. This will make bitcoin something other than bitcoin.
But if the new bitcoin is not like the old bitcoin, then people may not use it. Instead they will use something else.
This is a great problem for finance and its central banks. Cryptocurrencies are threatening central banks in ways that central banks have difficulty combating.
The future will be a great deal different than the past. Free markets are necessary for cyptocurrencies and therefore regulation will only complicate matters.
The future is now uncertain. And probably will be for a long time.