"Fama Predicts Bitcoin's Demise: 'Worthless' in a Decade"

Bitcoin, the world's leading cryptocurrency, has faced criticism from various quarters, with Nobel laureate Eugene Fama being the latest to predict its demise. Fama, often referred to as the "Father of Modern Finance," believes that Bitcoin will become worthless within the next decade.

In an interview with the Capitalisn't podcast, Fama argued that Bitcoin's rapid rise is unsustainable and that a financial system built on blockchains would require an immense amount of computing power. He also pointed out that cryptocurrencies violate the rules of a medium of exchange, as they lack a stable real value and have highly variable real value.

Fama is not convinced by the argument that Bitcoin serves as a hedge against inflation or "digital gold." He believes that for Bitcoin to be considered digital gold, it must have a use, and without a practical application, it is merely "air."

Currently, Bitcoin is trading at just above $96,000, making it the world's seventh-largest asset with a market capitalization of $1.91 billion. Fama cannot predict when the bubble will burst but hopes it will happen soon, as it would require a rethinking of monetary theory if Bitcoin continues to thrive.

Fama believes that if Bitcoin collapses, the broader economy will not be affected, as the crypto industry should not be considered part of the traditional financial system. However, the growing ties between Wall Street and the crypto sector, following the introduction of spot Bitcoin and Ethereum ETFs and the repeal of the SEC's SAB 121 accounting rule, may make it difficult to separate the two sectors.

In recent days, cryptocurrencies have experienced a significant sell-off, with Bitcoin falling below the $100,000 mark and losing around 9% of its value over the past seven days. Other major cryptocurrencies, such as Ripple's XRP, Dogecoin (DOGE), and Cardano (ADA), have also fallen from their historic highs.