Capitalisn't
Why This Nobel Economist Thinks Bitcoin Is Going to Zero, with Eugene Fama
Jan 30, 2025
Eugene Fama, Nobel Prize-winning economist and 'Father of Modern Finance,' shares his skeptical view on Bitcoin's future, predicting it will plummet to zero in a decade. He discusses the excessive electricity consumption of Bitcoin mining, questioning its sustainability. The conversation touches on the volatility of cryptocurrencies and their implications for banking and the economy. Fama also critiques the evolving perceptions of crypto among high-profile investors and highlights the need for regulation amidst growing distrust in traditional financial institutions.
45:08
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Quick takeaways
- Eugene Fama argues that Bitcoin's massive energy consumption raises doubts about its sustainability and long-term viability as a currency.
- The podcast emphasizes the need for regulation in the cryptocurrency market to protect consumers and address concerns about market manipulation.
Deep dives
The Puzzle of Cryptocurrencies
Cryptocurrencies pose a significant challenge to traditional concepts of money and trading. They operate outside of central authority, relying instead on decentralized networks such as blockchain. Bitcoin, the most well-known cryptocurrency, has become infamous for its environmental impact due to the massive energy consumption required for its operation. This has led to skepticism about its viability as a stable medium of exchange, akin to collectible Beanie Babies that hold value primarily through speculation rather than utility.
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