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Bitcoin is a failed currency, says New York University

Jerome Powell

TL;DR Breakdown

  • NYU professor says BTC does not pass for a currency
  • NYU professor picks ETH over BTC

Aswath Damodaran, a finance professor at the New York University’s Stern School of Business, has once again called Bitcoin a failed currency.

The know Bitcoin critic said this during an interview on episode 10 of the Moneycontrol Masterclass program.

The finance professor emphasized Bitcoin’s limited use in microtransactions as a reference that the digital asset does not pass as a form of money.

He describes a good currency as one that can be used to buy anything from street coffee to assets like houses and cars. Damodaran states that Bitcoin has not just failed as money but failed miserably.

While further speaking down on the number one cryptocurrency, the NYU professor said that the only claims of BTC passing for a currency is because early investors made a lot of money investing in the currency.

“When I run into Bitcoin enthusiasts, they seem to push this notion that Bitcoin is a great currency because they’ve made a lot of money on it,” Damodaran said.

Other points raised by Damodaran why Bitcoin is a failed currency

The professor previously argued that the 2017 bull run of the number one crypto is not enough metric to measure the crypto coin’s success.

He said at another forum that volatility and high transaction costs are a major setback to the cryptos’ use as a medium of exchange. Damodaran also dismissed claims by enthusiasts that the coin is a hedge against inflation. He called the digital currency a risky stock similar to the market upheaval of March 2020.

Damodaran picks ETH over BTC

The finance professor was blinded by his skepticism for BTC as he failed to acknowledge specific pertinent points to be considered when considering it for a currency.

He failed to mention that the number one coin closed out 2020 with a seven-fold price increase against the Black Thursday crash of March 2020.

However, he sided with Ethereum as a better commodity than BTC when he eventually considered that although BTC may not be a currency, he considered it passes for an asset or commodity.

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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