Nobel Prize-winning economist Eugene Fama, renowned for his work on market efficiency, recently doubled down on his skepticism toward Bitcoin, predicting it could plummet to zero. Known as the father of the “efficient market hypothesis,” Fama argues cryptocurrencies like Bitcoin lack intrinsic value—they don’t generate cash flow, dividends, or serve as reliable stores of value. To him, their volatility and speculative trading resemble a bubble waiting to burst. His critique isn’t new, but it’s rooted in traditional finance principles: if an asset doesn’t produce tangible returns, its long-term viability is questionable.
Fama’s stance clashes with Bitcoin’s narrative as “digital gold” or a hedge against inflation. He points out that unlike traditional assets—stocks, bonds, or even commodities—Bitcoin’s price hinges purely on investor sentiment. Without underlying fundamentals, its value is a self-fulfilling prophecy driven by hype. Even his own efficient market theory, which suggests prices reflect all available information, doesn’t save Bitcoin in his eyes. If markets eventually correct irrational exuberance, he believes crypto’s true “value” (or lack thereof) will be exposed.
Of course, crypto advocates push back. They argue Bitcoin’s decentralized nature, capped supply, and utility in cross-border transactions give it inherent worth. Institutions like BlackRock embracing Bitcoin ETFs and countries adopting it as legal tender suggest growing legitimacy. Yet Fama remains unconvinced. He likens Bitcoin to a speculative gamble, where early adopters profit at the expense of latecomers—a pattern seen in historical bubbles like the dot-com crash or tulip mania.
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