Eugene Fama, a Nobel Prize-winning economist, predicted a complete certainty that Bitcoin (CRYPTO: BTC), the largest cryptocurrency globally, will entirely depreciate within the upcoming decade.
What Happened: In a discussion on the Capitalisn’t podcast, the esteemed “father of modern finance” was inquired about the chances of Bitcoin’s worth sinking to zero in the next ten years, to which he responded, “I would say it’s close to one.”
Fama pointed out that cryptocurrencies are contrary to all established principles of monetary theory. His skepticism regarding cryptocurrencies emerged from their fundamental volatility. He contended that they oppose the core characteristics of a medium of exchange due to their inconsistent real value.
“They don’t possess a stable real value, you know. Their real value is extremely variable. Such a medium of exchange is not meant to endure,” Fama remarked. “Individuals are hesitant to conduct transactions in something that could jeopardize their business.”
The architect of the efficient market hypothesis also condemned the energy-draining process of mining that brings new Bitcoins into circulation.
“It’s simply not sustainable. You can’t establish an entire financial ecosystem based on this because it demands excessive computing power,” Fama asserted.
This bleak forecast follows a record-breaking year for the prominent cryptocurrency, which witnessed all-time highs of $109,000 and more than doubled its market valuation.
