Bitcoin to go bust in 10 years? Nobel-winning economist makes a startling claim

Fama, who won the Nobel Prize in economic sciences in 2013, was talking to Bethany McLean and Luigi Zingales on the podcast Capitalisn’t. The economist explained that cryptocurrencies are “such a puzzle because they violate all the rules of a medium of exchange.”

“They don’t have a stable real value. They have highly variable real value. That kind of a medium of exchange is not supposed to survive,” he said. 

This is not the first such criticism of Bitcoin, as the token’s value proposition has been a contentious matter for long considering its volatility, lack of intrinsic value, regulatory hurdles, scalability issues, and, most importantly, the environmental impact of mining Bitcoin.

The economist also spoke about the risks of the traditional financial system merging with speculative and volatile assets like Bitcoin. “I’m hoping it will go bust because if it doesn’t, we have to start all over with monetary theory. It’s gone. It might be gone already, but you have to start all over,” he said. 

Over the years, many traditional investors, such as Ray Dalio and BlackRock’s Larry Fink, have dismissed Bitcoin as a bubble and a means for money laundering. In his first term, Trump had described cryptocurrency as “not money” and something “whose value is highly volatile and based on thin air.”. On the second day as the 47th president of the United States, Trump launched his own cryptocurrency memecoin that is reportedly worth over $50 billion. 

As of February 7, Bitcoin is trading at a price nearing $97,326, according to CoinGecko. Its global market cap has crossed $3 trillion.