Nobel-winning economist predicts Bitcoin will collapse within a decade

e years, many traditional investors have criticized Bitcoin, including prominent figures like Ray Dalio and Larry Fink of BlackRock, who have dismissed it as a bubble and a tool for money laundering. Donald Trump also expressed skepticism towards cryptocurrency during his first term, describing it as not being real money and solely based on thin air. However, in a surprising move, on the second day of his presidency, Trump launched his own cryptocurrency memecoin, which has now reportedly amassed a value exceeding $50 billion.

As of February 7, Bitcoin’s trading price hovers around $97,326, with its global market capitalization exceeding $3 trillion. Despite its current success, Bitcoin continues to face challenges to its legitimacy. Critics point out problems such as its volatile nature, lack of intrinsic value, regulatory uncertainties, scalability issues, and the environmental consequences of Bitcoin mining.

Eugene F Fama, a distinguished Nobel laureate economist who received the Nobel Prize in economic sciences in 2013, recently shared his thoughts on the future of Bitcoin during an episode of the podcast Capitalisn’t. Fama described cryptocurrencies as puzzling entities that defy the conventional rules of a medium of exchange. He emphasized that cryptocurrencies lack a stable real value, attributing the highly variable nature of their value as a factor that undermines their longevity as a medium of exchange.

In December 2024, Bitcoin reached a milestone by attaining a market capitalization of $2 trillion, surpassing the market valuations of giants like Meta and Tesla. However, Fama predicted that Bitcoin’s value is destined to plummet to zero within the next decade. According to him, if Bitcoin does not serve a practical purpose, it holds no inherent value and is essentially worthless.

Fama outlined the fragility of Bitcoin’s value proposition, suggesting that it contradicts the fundamental principles of a reliable medium of exchange. He expressed concerns about the risks associated with integrating speculative and volatile assets like Bitcoin into the traditional financial system. Fama speculated that the survival of Bitcoin could potentially necessitate a reexamination of existing monetary theories, indicating that the future of Bitcoin remains uncertain.

Despite its current market success and widespread popularity, Bitcoin faces ongoing scrutiny and skepticism from financial experts and industry leaders. The debate surrounding the viability and sustainability of Bitcoin as a digital currency continues to evolve, with proponents and critics offering contrasting viewpoints on its long-term prospects. As the cryptocurrency landscape continues to evolve, the future of Bitcoin remains uncertain, with its fate likely to be influenced by regulatory developments, market trends, and technological advancements in the digital asset space.