Nobel Economist Fama: Bitcoin's Value Could Hit Zero
1min read Economist Eugene Fama, a Nobel laureate in economics, has predicted that Bitcoin's value could eventually reach zero. In a recent interview on the podcast "Capitalisn't," Fama expressed his skepticism about cryptocurrencies, arguing that they violate the fundamental rules of a medium of exchange due to their unstable real value.
When asked about the probability of Bitcoin's value dropping to zero within the next decade, Fama replied, "I would say it's close to one." He further explained that cryptocurrencies are not supposed to survive as a medium of exchange because they do not have a stable real value. Fama's comments have sparked controversy within the crypto community, with some expressing anger at his views.
Fama also discussed the concept of an economic bubble, stating that he hopes Bitcoin bursts because it could potentially invalidate existing monetary theory. He argued that crypto violates the rules of a medium of exchange and that people are unlikely to use it as a currency due to its unstable value.
When asked about stablecoins, Fama suggested that using U.S. dollars on the blockchain could work, as dollars have stable, real value. He also mentioned the threat of a 51% attack, which could compromise the security of the Bitcoin network. Fama further emphasized that gold is more favorable than Bitcoin because it has multiple use cases.
It is essential to note that Fama's predictions were not expressed with absolute certainty. He acknowledged the possibility of being wrong and demonstrated an open mind to adapting his views. Despite his skepticism, Fama's insights provide valuable perspectives on the future of cryptocurrencies and the challenges they face in the broader economic landscape.
