Bitcoin Will Eventually Be Zero, Economist Predicts: Here's When

Eugene Fama, the famous "Father of Modern Finance", predicted that Bitcoin would be worthless within a decade.

Why? Cryptocurrencies "violate all the rules of the medium of exchange," Fama said on the Jan. 30 episode of Capitals'. "They don't have a stable real value. You know, they have very variable real values. This kind of medium of exchange is not supposed to last."

Fama, who wrote the efficient market hypothesis in the 1960s, did not actually guarantee that Bitcoin would be worthless. Rather, when podcast host, finance professor Luigi Zingales asked, "In 10 years, will the value of Bitcoin go to zero?"

"I'd say it's close to one," Fama replied.

'Is it bubbles?'

The interview began with Fama disapproving of the term "economic bubble" because bubbles need to have a predictable end. But nothing in the market is predictable, he argues. 

Journalist Bethany McLean, who co-hosts the show with Zingales, asked Fama if Bitcoin was a bubble, with Fama indicating that he expected it to burst.

"I'm hoping it explodes because, if it doesn't, then we'll have to start all over with monetary theory — it's gone," Fama said. "It might be gone already."

Crypto violates all rules through communication because they don't have a permanent value and won't use it the same way, he will explain. This sentiment, predictably, angered some in the crypto community.