Bitcoin has experienced plenty of ups and downs since creator Satoshi Nakamoto released its white paper in 2009, with more than a few doomsayers predicting a drop to $0 during every correction or bear market.
Legendary investor Warren Buffett and stockbroker Peter Schiff are arguably two of the loudest voices criticizing Bitcoin (BTC) and predicting its downfall.
However, they may never get their wish because it might not even be possible for Bitcoin to reach a value of $0.
Speaking to Cointelegraph, Jonathan Isaac, chief marketing officer at CoinMarketCap, said that while Bitcoin hitting zero is theoretically possible, it’s “extremely unlikely” without some sort of “catastrophic event.”
Isaac said that if everyone who holds Bitcoin suddenly decides it’s worthless and sells at the same time, its value could plummet.
“Given how huge, global and passionate the Bitcoin community is, that’s pretty hard to imagine,” he added.
“Plus, people use Bitcoin for all sorts of things — a way to store value, make payments, or as a hedge against traditional finance. As long as it’s useful, it’ll be valuable.”
According to Exploding Topics, there are 46 million unique Bitcoin wallet addresses.
Breakdown of Bitcoin wallet addresses. Source: Exploding Topics
Companies like Tesla, Metaplanet and Semler Scientific have also added Bitcoin to their treasuries. MicroStrategy, which has 226,500 BTC in a stash worth around $13 billion, is leading the pack, according to Saylortracker.com.
“Consider the massive ecosystem built around Bitcoin — businesses, projects, miners, exchanges, technologies and more. The infrastructure is so well established, it’s not something that just evaporates overnight,” Isaac said.
“The Bitcoin network has also proven pretty resilient over its existence. How many times have we heard that Bitcoin is dead, and then it comes back stronger than ever?”
Isaac added that another way Bitcoin could reach zero is through extreme regulations or a “coordinated global ban” that drives the price into the ground.
He said it’s unlikely, though, given that it would be “difficult to envision and execute,” and some governments are actively working with the industry, ensuring it will always have a friendly jurisdiction.
At least two countries have adopted Bitcoin as legal tender. El Salvador was the first in 2021, followed by the Central African Republic in 2022.
In May 2023, the European Council also adopted the first comprehensive legal framework for the crypto industry.
El Salvador’s Bitcoin portfolio as of December 2023. Source: Nayib Bukele
According to Isaac, other more “far-fetched scenarios” could drive the price to $0, such as an unfixable vulnerability in the Bitcoin protocol.
Quantum computing advances could break Bitcoin’s cryptography, or a superior technology could make it obsolete.
“These would be truly unexpected ‘black swan’ events — not impossible, but highly unlikely,” Isaac said.
“And the broader crypto market reaching $0 is even less plausible, given the diversity of projects out there.”
Bitcoin will likely always survive in one form or another
Lyn Alden, an investment researcher and founder of Lyn Alden Investment Strategy, told Cointelegraph that for Bitcoin to reach $0 in our lifetimes, it would likely take some sort of critical bug or exploit.
Even then, she said it would likely live on through a surviving fork because it’s doubtful there is a “scenario where there literally is no functioning blockchain around and that the industry literally goes to zero.”
“Thus far, it has been shown that even when blockchains are effectively dead in terms of size and liquidity, they don’t really go to zero, or at least they take a very long time to do so relative to the timeframe that they’ve currently existed,” she said.
“This is because, unlike a company, there is minimal overhead to keeping some basic lights on for a blockchain.”
According to Alden, a greater risk to Bitcoin would be “stagnation,” which she sees as a high risk for the vast majority of the industry.
However, given that Bitcoin has been the dominant blockchain for 15 consecutive years, she said it has “graduated to that dominant protocol level, which likely gives it an extremely long lifetime of relevance.”
If Bitcoin hits zero, the world might have ended
Tony Sycamore, a market analyst for online brokerage platform IG, told Cointelegraph that the odds of Bitcoin going to $0 are very low, but not impossible.
Sycamore argued it would take an extreme event to topple the largest cryptocurrency by market cap.
“For example, if crypto were outlawed by all governments worldwide or if the technology it is based upon proves to be less secure or stable than originally expected,” he explained.
“In the event of a severe global economic recession or depression, it could also become worthless.”
Brady Swenson, co-founder of Bitcoin platform Swan Bitcoin, said that if Bitcoin ever reached $0, the world might have experienced a “catastrophic event that set human civilization back centuries” — in which case, everyone would have much larger concerns.
Regardless, Swenson believes that whatever happens, there will always be believers — “the hodlers, who believe in Bitcoin and its ability to change the world by fixing the money” — creating a floor price well above $0.
Source: The Great Martis
“There will also likely always be believers in particular cryptos who hold on despite massive price drops,” Swenson said.
“In the long run, free market money and network protocols tend toward one. Bitcoin will be the larger market by far, and crypto will be relegated to tiny niche use cases.”
A tyrannical government could steal all the Bitcoin, but it won’t hit $0
Governments have been slow to create rules and regulations regarding the crypto market. Most have not outlawed it, but they have not exactly embraced it with open arms either.
Greg Magadini, director of derivatives at market intelligence firm Amberdata, told Cointelegraph he thinks a more plausible scenario than Bitcoin going to zero would be a tyrannical government trying to hoard it all.
“It’s possible for Bitcoin to jurisdictionally transform from an asset to a liability given the wrong political environment, or [if it] becomes too risky to hold, even if the price is above $0 internationally,” he said.
“Just take a look at how this was done historically — for example, Franklin D. Roosevelt’s 1933 Executive Order 6102, which required citizens of the US to give up their gold to the Federal Reserve.”
Executive Order 6102 forbade the hoarding of gold by private citizens within the continental United States.
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Everyone had to deliver all their private gold holdings to the Federal Reserve or face huge fines, up to 10 years in prison, or a combination of the two.
The rationale was that hard times had caused the hoarding of gold, stalling economic growth and worsening the depression. At the time, the US was using gold to back its currency.
Magadini argued that even in this case of government overreach, Bitcoin would still not go to $0 — it would just be harder to hold onto it.