People have always doubted BitcoinBut when a Nobel Prize -winning economist said it will eventually fail, many pay attention.
Eugene Fama, known as “Father for Modern Financing”, thinks that Bitcoin will eventually be worth nothing. What is his reason? Bitcoin has no real value, does not work well for buying and selling and does not fit in ordinary banking systems. Is his case meaningful?
Bitcoin’s weaknesses: a deadly deficiency or misunderstood development?
Fama is mainly worried about how unpredictable Bitcoin is. In order for a currency to work well, it must be stable. Bitcoin changes a lot in value, which makes it difficult for companies to accept it as payment. Fama believes that Bitcoin’s uncertainty makes it difficult to use as a way to buy and sell things.
He also claims that bitcoin lacking the support of a central authority. Unlike Fiat currencies, as governments support, Bitcoin receives value purely from market speculation and demand. If demand disappears, the price goes to zero. It’s his core thesis, but is that the whole story?
Nobel Laureate Eugene Fama predicts that bitcoin will be useless https://t.co/smpqyoodmh via @Promarket_org
– the activist investor (@activistinvestr) January 31, 2025
The shop with value debate: Is Bitcoin Digital Gold?
Critics of Fama’s argument point out that Bitcoin is not just trying to be a currency – it develops into something else. Many people see it as digital gold, a store of value that is immune to inflation and government control. Unlike traditional currencies, Bitcoin has a fixed supply of 21 million coins, which makes it barely and potentially deflationary.
New: “Nobel Laureate” Eugene Fama predicts Bitcoin will “go to $ 0 in 10 years”
What an idiot 🤡 pic.twitter.com/dvz4x4y2ol
– Bitcoin -historian (@Pete_rizo_) January 30, 2025
In that sense, Bitcoin’s volatility can be a function rather than a deficiency. Gold Not used in everyday transactions, but it has enormous value because of its scarcity and historical confidence. If Bitcoin follows a similar course, it can never be used to a large extent for payments – but that does not mean that it is worthless.
What would it require for Bitcoin to go to zero?
In order for Bitcoin to really collapse, some extreme scenarios would need to develop. A worldwide ban can crush demand, which makes it difficult for investors to hold or shop. A technological failure – for example, a disastrous error in the Bitcoin protocol – could undermine confidence. Or a superior option can replace it.
But history suggests that bitcoin is resistant. It has survived several crashes, breakdowns of regulatory and criticism from economic heavyweights. Each time it has hoped back stronger. Can Fama be right in the long term? Possibly. But betting against Bitcoin has proven to be a losing game so far.
The judgment: A polarizing future in the future
Bitcoin’s future remains uncertain and opinions are as divided as ever. While some believe it is doomed, others see it as a revolutionary financial instrument. Reality? Bitcoin is still developing, and its fate will depend on adoption, regulation and market forces.
Image from City AM, Chart from TradingView
