Bitcoin’s Fate : Nobel Economist Sees An Inevitable Crash

Cryptos continue to divide the academic and financial world. While some see it as an inevitable monetary revolution, others maintain that it is a bubble destined to burst. Eugene Fama, a renowned economist and Nobel laureate, threw a stone in the pond by claiming that bitcoin is doomed to become worthless. According to him, fundamental economic principles make its long-term survival impossible. A radical prediction that provokes many reactions, especially in a context where BTC continues to be adopted by financial institutions and governments.

An unstable currency doomed to failure ?

In a recent episode of the podcast Capitalisn’t, Eugene Fama did not mince his words: “I would say that the probability of bitcoin falling to zero in the next ten years is close to 1.” The economist justifies his analysis and explains that bitcoin violates all the rules of a means of exchange. Unlike traditional currencies, it has no stable value, and its use as a means of exchange is limited by its extreme volatility.

Fama goes further and rejects the idea that bitcoin could be likened to digital gold. For him, the comparison does not hold, because gold has industrial uses and has served as a recognized store of value for millennia. In contrast, bitcoin would rely solely on speculation: “If it has no utility, it’s just paper. Not even paper, it’s air, not even air.” A criticism that, according to him, is enough to condemn bitcoin to a gradual disappearance.

A contested but evolving economic model

While Eugene Fama believes that bitcoin’s volatility hinders its adoption as currency, he recognizes that dollar-backed stablecoins could work. An important detail that shows his skepticism is not about blockchain itself, but rather about the non-regulated and speculative nature of bitcoin.

Another threat mentioned: 51 % attacks. Fama recalls that every monetary system relies on a balance between security and verification. However, according to him, bitcoin could be vulnerable if an entity managed to control the majority of mining power, which would undermine trust in its network.

But this pessimistic view overlooks a key point: bitcoin is constantly evolving. The emergence of new solutions, such as the Lightning Network to facilitate payments or progressive adoption by institutions, could strengthen its place in the global financial system. Moreover, the crisis of confidence in traditional currencies pushes some economic actors to consider bitcoin as a legitimate alternative, especially in countries experiencing high inflation.

Eugene Fama’s statements echo those of many skeptics who predicted the imminent disappearance of bitcoin… without it happening. While the economist highlights real challenges, his analysis is based on a traditional view of finance, without considering technological advancements and the growing adoption of BTC. It remains to be seen whether, in ten years, bitcoin will be reduced to nothing… or whether it will have proven that even the greatest economists can be wrong.