In a recent interview, Eugene Fama Predicted that the price from Bitcoin will fall to zero:
Bitcoin has given this new mainstream adoption an illusion of legitimacy, but Fama argues that it does not change the fundamental issue: Bitcoin still has no intrinsic value. “If the demand for Bitcoin disappears, then his prices,” Fama emphasized.
When they are printed by podcast hosts about whether the price of Bitcoin could eventually crash, Fama resulted in a hair -raising reaction: “I would say it is close to one.”
He went even further and stated that he hopes that Bitcoin will collapse, because if that is not the case, you must start completely with monetary theory. “
“I hope it will fail, because if that is not the case, you must start completely with monetary theory.”
Before I respond to this, I have to mention that I am not a Bitcoin investor and have no opinion about where the price is going. Instead, I want to respond to Fama’s claim that Bitcoin offers challenges for monetary theory. This is incorrect because Bitcoin is not money. To make an active money, it must be a medium. Bitcoin is not an account medium because the prices of goods, services, labor and financial assets are rarely mentioned in Bitcoin. The success of Bitcoin is no challenges for monetary theory at all.
I think of Bitcoin as a kind of electronic gold. Gold is a value of value for the Boomer generation, and Bitcoin is a value storage for the generation of Zooomer – for people who have been raised in the era of iPhones and computers.
Gold has a few industrial use, but most of its value comes from its use as a value storage. People appreciate gold especially because they believe that other people will appreciate gold in the future.
Bitcoin is occasionally used in transactions, but most of the value comes from its use as a store of value. People mainly appreciate Bitcoin because they believe that other people will appreciate Bitcoin in the future.