Nobel laureate Eugene Fama: Bitcoin is valuable only as a means of payment

The 2013 Nobel Prize winner in economics believes that the viability of bitcoin as a means of payment is greatly reduced due to its high volatility.

American economist Eugene Fama said in an interview that the first cryptocurrency will have value if it is used as money.

“When users use bitcoin as a means of payment, they actually conduct transactions with it – then BTC can have value, as it turns into a kind of money and unit of account. This method gives value to bitcoin. Usually, bitcoin is used in transactions and its supply is limited – in this case, it has no value, ”the expert argues.

The economist wonders if users will make transactions when bitcoin has such a high volatility.

“Monetary theory says that a unit of account will not survive if it does not have a sufficiently stable real value, and its real price should not rise and fall sharply,” says the Nobel Prize winner.

Fama disagrees with the claim that BTC is a store of value. According to him, the idea that bitcoin has value should be considered a temporary phenomenon:

“In the long run, bitcoin cannot be a store of value, there is nothing that gives value, except for the investors who store it. There must be something really useful in the product so that people want to keep it for a very long time. The only reason is that people think: is it a store of value? So at some point bitcoin will collapse.”

Eugene Fama claims that the market has not yet realized that Bitcoin has no value, and when it does, the reference crypto asset will leave the market.

Former American intelligence analyst Edward Snowden said in June that, unlike fans of the crypto industry, he did not call for investing in digital currencies, but advised using them for payments. At the same time, the analytical company Arcane Research warned last month that by 2040, when Bitcoin becomes a means of payment, its energy consumption will grow to catastrophic proportions.