“Father of Modern Finance” Predicts Bitcoin’s Demise

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• Nobel laureate Eugene F. Fama has predicted that Bitcoin will become worthless within the next decade
• Fama has criticized Bitcoin’s extreme volatility and lack of intrinsic value
• He also doubted its viability as a medium of exchange due to its unstable value

Nobel laureate Eugene F. Fama has expressed a strong belief that Bitcoin will lose all value within the next ten years due to its lack of intrinsic value and its volatility. Fama, who earned a Nobel Prize in Economic Sciences in 2013, has also argued that Bitcoin’s instability makes it unsuitable as a medium of exchange. His calls echo hundreds made over the years, all of which have proved spectacularly wrong.

Bitcoins Fama Convinced Bitcoin Will Die Within a Decade

Eugene F. Fama is an American economist renowned for his groundbreaking work in financial economics, particularly his development of the Efficient Market Hypothesis (EMH).  In 2013, he was awarded the Nobel Prize in Economic Sciences for his contributions to asset pricing and market efficiency.

Over the decades, Fama has remained an influential voice in economics, frequently challenging conventional wisdom on financial bubbles, cryptocurrencies, and the nature of risk in markets. In a recent discussion on the podcast Capitalisn’t, the man often referred to as the “Father of Modern Finance” predicted that Bitcoin’s value is likely to drop to zero within the next decade:

In the discussion, Fama was skeptical about Bitcoin’s long-term viability, emphasizing that its lack of stable value and intrinsic worth undermines its potential as a sustainable currency. He suggested that Bitcoin’s current valuation is driven by speculative behavior rather than fundamental value, reinforcing his prediction of its eventual decline to zero. When asked about the probability of Bitcoin becoming worthless in ten years, Fama responded, “I would say it’s close to one.” 

Bitcoins Cryptocurrencies Are a “Puzzle”

Fama also took aim at cryptocurrencies in general during the episode:

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.

There are many who would agree with Fama when it comes to most cryptocurrencies but would disagree when it comes to Bitcoin, which has seen extremely influential members of the banking institution recognizing its value as a decentralized form of digital gold.

In predicting Bitcoin’s death, Fama has added his name to a cast of hundreds, all of whom have been not just wrong to date but spectacularly wrong.