Bitcoin’s Doom? A Most Unfortunate Prediction! 😱

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Mr. Eugene Fama, a gentleman of considerable reputation in the world of finance, though perhaps a tad dogmatic, has declared that Bitcoin shall, within a decade, be rendered utterly worthless. One might suppose this pronouncement would cause a stir even amongst those not particularly interested in the peculiarities of such digital affairs.

His reasoning, shared during a recent podcast, Capitalisn’t (a title which, one must admit, possesses a certain charm), is that these cryptocurrencies, with their fluctuating values, flout every proper rule of exchange, and therefore, are quite doomed. A medium of exchange, he observed with a knowing air, ought not to be so fickle.

Though Mr. Fama did not, strictly speaking, make a solemn guarantee of Bitcoin’s demise, he did most readily concur when the host, a Professor Luigi Zingales, inquired as to the probability of its value collapsing to zero within a decade. To this, Mr. Fama confidently asserted that such a probability was “close to one”. Indeed, a most decisive opinion.

‘Is it a bubble?’ A Most Delicate Inquiry 🤔

The discourse commenced with Mr. Fama expressing his disdain for the term “economic bubble”, arguing that such occurrences should possess a predictable conclusion, which, he quite rightly pointed out, is most difficult to accomplish in the market. But perhaps that is simply because economists have yet to develop a system where all the workings of the market can be perfectly understood, such an endeavour might prove tedious indeed.

Ms. Bethany McLean, the co-host and journalist of the show, with the sort of curiosity that is so often found in those of her profession, inquired as to whether Bitcoin was a bubble. To this, Mr. Fama replied he would heartily welcome its bursting. One might even say he hoped it would burst, thereby saving everyone considerable time and trouble trying to explain why it should not survive.

“Indeed, if it does not, we must rewrite the entire monetary theory! It might be out of date even as I speak!” he declared. Quite a dire prospect!

“Everything we believe about monetary theory suggests it ought not to survive,” he stated. A rather uncompromising observation.

His point, as he so eloquently explained, was that crypto’s lack of stable value will make it useless as a currency. As one might expect, this sentiment was most displeasing to those with vested interests in this rather strange world of digital coin 😠.

“But What About Stablecoins?” 🤔

Ms. McLean, not one to shy away from a challenge, put forward the question of stablecoins, which he allowed, might “work”, as dollars are possessed of stable, real value. One might conclude this was almost an admission of a possible flaw in his own argument, but one must commend him for such concession.

Another of his many objections to Bitcoin was the possibility of a 51% attack. He readily acknowledged such an endeavor would be quite costly, yet still, he remarked, every system faces problems concerning verification and who exactly is responsible for enforcing the rules. Quite the quandary indeed.

Mr. Fama, recipient of the Nobel Prize in economics, an honor of no little consequence, insisted that gold, unlike Bitcoin, possesses numerous use cases and is a far more sensible investment. Mr. Fama further suggested the involvement of the government may hasten Bitcoin’s demise. Quite an unpleasant end for a digital invention.

It must be mentioned that Mr. Fama, in his discourse, touched upon several of the most obvious threats to decentralized digital currency. However, one must concede his predictions were not made with absolute certainty. He might well be wrong, as is so often the case in such matters.

Indeed, Mr. Zingales, with a note of admiration, remarked that Mr. Fama “was willing to adapt his universe at age 86,” a quality Mr. Zingales found, “truly remarkable.” Well, one must suppose it is something, to be willing to admit one might not be entirely infallible, even at such an advanced age. 🧐

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Bitcoin
Gold

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2025-02-01 22:59