There has always been skepticism around Bitcoin. Nobel-winning economist Eugene Fama, known as the father of modern economics, recently predicted that Bitcoin will become entirely worthless within the next 10 years. His comments have sparked global debate.
However, despite these predictions, Bitcoin continues to break new records. Could Donald Trump’s rise to power be influencing this surge?
In November 2024, Bitcoin crossed the $100,000 milestone for the first time. It is believed that Trump’s crypto-friendly policies have instilled new optimism in the market. On January 20, 2025, just before Trump was sworn in for his second term as U.S. president, Bitcoin peaked at $109,241.
Trump, who has shown a positive attitude toward cryptocurrency, has already endorsed stablecoins (cryptocurrencies pegged to the digital dollar) and proposed the creation of a strategic Bitcoin reserve.
Meanwhile, as of 7:47 AM (GMT) on Thursday, February 6, 2025, the price of Bitcoin stood at $97,186.
Why does Fama predict Bitcoin’s collapse?
While crypto supporters hope for Bitcoin’s price to soar, Fama has a contrary view. The pioneer of modern economics believes that the fundamental flaws of Bitcoin will eventually lead to its downfall. Among these flaws are extreme volatility—making it unreliable for daily transactions. Additionally, there is no central control—unlike traditional currencies, Bitcoin is not regulated by any government or institution. It solely depends on demand, and if that demand diminishes, its value could fall to zero. Furthermore, if Bitcoin is not widely used as a medium of exchange, can it truly be considered real currency?
Is Bitcoin digital gold?
In contrast to Fama’s views, supporters argue that Bitcoin is not just a currency; it is now considered “digital gold.” The reasoning behind this is Bitcoin’s limited supply. Currently, the total supply of Bitcoin in the crypto market will not exceed 21 million, making it scarce and one of the key factors driving up its value.
Bitcoin is also immune to inflation—unlike traditional currencies, its supply cannot be increased. As a result, central banks or governments cannot devalue it by printing excessive amounts. During times of economic crisis, it could become an alternative investment.
However, critics believe that Bitcoin’s value is still dependent on policy decisions from various countries and market sentiment, meaning it is not entirely free from the influence of the broader market.
What could cause Bitcoin’s collapse?
Some of the biggest threats to Bitcoin’s survival include global bans. If governments worldwide decide to completely prohibit Bitcoin transactions, its market could collapse.
Another risk is technological flaws. If a significant issue arises with Bitcoin’s underlying technology, it could lead to its demise. Additionally, the emergence of a more advanced alternative currency could pose a threat. If a cryptocurrency more efficient and reliable than Bitcoin were to emerge, investors might shift away from Bitcoin.
Is Bitcoin’s “scarcity” real or a myth?
Some economists believe that Bitcoin’s limited supply is essentially meaningless. Economist Peter Schiff argues that anyone can create a new currency at a low cost with a fixed supply, which raises doubts about the concept of digital currency’s “scarcity.”
The debate over Bitcoin’s future continues. Analysts like Fama and Schiff believe it will collapse, while supporters view it as a revolutionary force in the economy.
Liberty News economy correspondent reports that one thing is certain, Bitcoin and other cryptocurrencies are still in the process of evolution. Their future depends on factors such as acceptance, institutional investment, regulation, and market conditions.
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