The bitcoin price may drop to almost zero, says the chief economist of one of the world's largest investment company.

Joe Davis, global chief economist and global head of the investment strategy group for $5.1 trillion asset manager Vanguard, wrote in an article that the company positively assesses prospects for blockchain technology, but does not consider cryptocurrencies as viable assets.

"I'm enthusiastic about the blockchain technology. In fact, Vanguard is using such. As for bitcoin the currency? I see a decent chance that its price goes to zero."

Davis explains that bitcoin should not be classified as a currency, because it is not an effective store of value. He continues criticizing the first cryptocurrency, noting that the current price of bitcoin is based solely on assumptions and has no economic foundation.

"The investment case for cryptocurrencies is weak. Unlike stocks and bonds, currencies generate no cash flows such as interest payments or dividends that can explain their prices. National currencies derive their prices from the underlying economic activity of the countries that issue them. Cryptocurrency prices, on the other hand, are generally not based on economic fundamentals. To date, their prices have depended more on speculation about their eventual adoption and use. The speculation creates volatility that, ironically, undermines their value as a currency."

Like many other financiers, Davis likens bitcoin to tulipomania in Holland in the 17th century, adding that "unlike tulips, they don’t look very nice in a vase."

Last year, Vanguard Group founder Jack Bogle advised investors to "avoid bitcoin like the plague," because it has no underlying rate of return. “Bitcoin may well go to $20,000 but that won’t prove I’m wrong. When it gets back to $100, we’ll talk,” Bogle concluded.