Nobel Prize-winning economist predicts collapse of bitcoins
Predictions about the future of cryptocurrencies are divided between enthusiasts of technological innovations and their application in the capital environment and those who see risks to economic stability.
Winner of the Nobel Prize in Economics in 2013, Eugene Fama is on the list of experts who demonstrate a skeptical view of the future of this asset.
Fama expressed his opinion while participating in a podcast on 30/1/2025. For the economist, cryptocurrencies have a "predictable end."
Cryptocurrencies are a mystery because they violate all the rules of a medium of exchange. They do not have a real stable value. They have a truly variable value,” noted the American economist, who won the Nobel alongside Peter Hansen and Robert Schiller for pioneering work in identifying trends in financial markets.
"It’s the kind of medium of exchange that shouldn’t be able to survive. I hope it bursts, but I cannot predict that. I hope it does, because if it doesn’t burst we will need to restart all monetary theory," he added.
In other words, for Fama, the market for bitcoins and other cryptocurrencies is a bubble that will burst at some point. The prediction is based on traditional monetary theories.
The economist believes that this collapse of the cryptocurrency market could happen in up to a decade. Eugene Fama considers it "unsustainable" for the global financial system to migrate entirely to so-called blockchain networks. This is because it would require enormous computational capacity.
Source: Flipar
