As President Donald Trump advances a pro-crypto agenda in Washington, a prominent Nobel Prize-winning economist is forecasting that the world’s leading cryptocurrency will be worth nothing in just 10 years.
“It’s only digital gold if it has a use,” Eugene F. Fama said in a podcast. “If it doesn’t have a use, it’s just paper. Not paper, it’s air, not even air.”
Bitcoin’s value proposition has long been questioned by detractors for its volatility, lack of intrinsic value, regulatory risks, limited utility for payments, scalability issues, concentration of wealth, and the environmental impact of Bitcoin mining.
“Cryptocurrencies are such a puzzle because they violate all the rules of a medium of exchange,” Fama explained. “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.”
Fama also highlighted the risks of the traditional financial system merging with speculative, volatile assets like Bitcoin. “I can’t predict when it will bust. I’m hoping it will bust, but I can’t predict it,” he said. “I’m hoping it will 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.”
Fama won the Nobel Prize in economic sciences in 2013, alongside economists Lars Peter Hansen and Robert J. Shiller for their work on asset prices.
Bitcoin is currently trading at a price near $96,731, according to CoinGecko. Meanwhile, the global market cap for crypto has crossed $3.15 trillion.
