Harvard’s Kenneth Rogoff Admits Underestimating Bitcoin’s Role in Underground Economy

Kenneth Rogoff, Harvard economics professor and former IMF chief economist, has acknowledged he underestimated bitcoin’s resilience, which has been supported by its use in the global underground economy.

Back in 2018, Rogoff predicted bitcoin (BTC) was more likely to crash to $100 than rise to $100,000 within a decade. At that time, bitcoin traded below $10,000.

Contrary to his forecast, bitcoin’s price soared past $100,000 earlier this year, marking a tenfold increase since Rogoff’s prediction.

With bitcoin hovering near $113,000 on Tuesday, Rogoff reflected on his miscalculation, saying he had been “far too optimistic” about U.S. regulators adopting strict measures to control cryptocurrency use.

In a post on X, Rogoff expressed disappointment that policymakers did not clamp down on cryptocurrencies as he had expected, allowing bitcoin to thrive despite concerns over tax evasion and illicit activity.

He admitted he underestimated bitcoin’s appeal as an alternative to fiat currencies within the $20 trillion underground economy, which creates steady demand that “puts a floor on its price,” a theme he explores in his latest book, Our Dollar, Your Problem.

Rogoff also pointed to a “blatant conflict of interest” in regulators themselves holding substantial cryptocurrency holdings—potentially hundreds of millions or billions of dollars—without facing repercussions.