Robert Breedlove, CEO of Parallax Digital, said that although Bitcoin is the most secure computer network in human history, several black swan events have the potential to wipe out the asset.
Speaking to Kitco News, Breedlove acknowledged that it is difficult to identify the specific event, but any incident that drastically reduces the hash rate will cloud Bitcoin’s future.
He said the hash rate plunged following China’s Bitcoin mining ban, but the asset managed to recover.
However, Breedlove notes that if China, the most surveilled state in the world, failed to stop mining, no other country could successfully ban Bitcoin and related activities.
“What will make me change the tune I sing about Bitcoin is achieving a black swan that drastically depresses the hash rate. The hash rate is the amount of energy and capital allocated to bitcoin’s production and security, which I would expect would be reflected in the price. That would take a hell of a hit because right now bitcoin is by far the most computer network most secure in human history,” Breedlove said.
He also cited changes in the protocol layer, a cosmological event, and an electromagnetic pulse as other potential threats to the cryptocurrency’s existence.
The threat of regulations
At the same time, Breedlove said the current known threat to Bitcoin is regulatory. He noted that based on the threat posed by Bitcoin to the traditional financial system, regulators could implement tough regulations similar to Executive Order 6102 in the 1930s which saw the government ban private ownership of gold.
However, he considers Bitcoin to have the upper hand due to its decentralized nature and portability.
He also pointed out that traditional financial institutions have already realized the threat of Bitcoin. For example, Breedlove pointed to the warning from the International Monetary Fund after El Salvador adopted Bitcoin as legal tender.
According to the executive, the warning is disguised as financial stability protection, but in reality it is based on attempts to cut off Bitcoin’s growing dominance.
Regarding Bitcoin’s future prospects, Breedlove said the asset could reach a market capitalization of around $5 trillion in the next five years.
Although the asset’s market cap has shrunk significantly in 2022, he believes the goal is near as Bitcoin surpassed the $1 trillion cap at one point.
Watch the full video: The Bitcoin ‘Black Swan’ Event That Would Wipe Out Crypto – Robert Breedlove