Bitcoin has no intrinsic value?

Criticism of an American intellectual against the oldest cryptocurrency

American economist and 2013 Nobel Prize laureate in economics, Eugene Fama, says there is only one possible case where Bitcoin (BTC) could have any intrinsic value. Specifically, it is about a situation where BTC is used as money. However, considering the fact that the leading cryptocurrency does not have "stable value", he believes that sooner or later it will "crash".

Bitcoin could potentially have value, but...

Eugene Fama, who is referred to by some as the "father of modern finance," believes that Bitcoin can only be valuable if it is used as money by society.

If people use it as a medium of exchange - in other words, they actually trade in it - then it can have value, because then it's a kind of money, it's a unit of account. It is simply a designate that we can give a certain value, because it usually occurs in transactions and its supply is limited, so in that case BTC could have a value, Fama pointed out.

- The question is whether people will make transactions in such a unit of account? What we know is that BTC, like other cryptocurrencies, has a highly variable value. Monetary theory says that a unit of account will not survive if there is no reasonably stable real value and its real price cannot go up and down extremely high, he added.

Bitcoin has no real value

The American Nobel Prize winner believes that the market has not yet realized that the largest cryptocurrency in terms of overall market capitalization has no real value, and warns that the day will ultimately come when the existence of BTC will collapse.

"People who say they are investing in Bitcoin because other people are investing is a road to nowhere..." he warned.

- We've had a pretty big market crash recently, haven't we? Some smaller players drowned… I personally believe that it will happen again in the future, unless something happens to make the real value of BTC more stable, so people will be willing to trade with it, pointed out the American economist.

Fama also disagrees with the view that BTC is a vehicle of value over time. According to him, the perception of Bitcoin as a store of value is a temporary phenomenon that will soon pass.

- In the long run, Bitcoin cannot be a repository of value, unless there is something that gives it real market significance, in particular, it must be more than people who are willing to hold it. BTC would have to have something intrinsically useful for its holders to want to keep this digital currency for a very long time. If it's just because the cryptocurrency community thinks it's a store of value, Bitcoin will explode at some point, Fama believes.