Cryptocurrency is a whole new world. Sure it’s been around for a couple of years now but there are still so many unknowns.
An while many believe Bitcoin won’t ever hit zero, it could happen, much like all investments. I mean, how many of us believed Lehman Brothers would be around forever?
If Bitcoin did hit zero then a market of around $160 billion (as of March 2020) would have been removed from the world economy entirely.
However, the largest and most popular cryptocurrency could still revive itself from zero, after all a currency is always worth something, right?
How Could Bitcoin Hit Zero?
Before we understand what would happen if Bitcoin hit zero, it’s first important we understand how it could happen. In my opinion, only a small number of things would trigger the most popular cryptocurrency hitting zero value;
- The demand for the currency declines to zero. This comes down to the basics of supply and demand. Even with the slightest amount of demand Bitcoin is going to remain of some value.
- It was not possible to buy Bitcoin. This is a slightly more complex process that would only occur if those mining Bitcoin found it no longer of value to do so (the cost of electricity to mine is higher than the Bitcoin reward) and therefore it would not be possible for transactions to be processed.
- Bitcoin has always labelled itself as censorship-resistant money. Therefore if the currency was adopted institutionally then this will no longer be the case and is likely to crash to zero as a result.
What Would Happen If Bitcoin Hit Zero?
So, should the above happen resulting in Bitcoin hitting zero what would happen?
The only thing we can say for certain is that $160 billion (as of March 2020) would have been lost from the world’s economy. That equates to around 0.02% of the $84,835.46 billion of the world’s GDP (in 2019).
As Bitcoin is the leading Cryptocurrency many believe Bitcoin hitting zero would mark the end for the currency type altogether.
This would have a knock-on effect on Blockchain technology and the Blockchain platform which is currently used for cryptocurrency transactions.