Hey, crypto fam! š I know youāve seen this claim *a million times* here on Binance Square, but now a big name in finance is saying it loud and clear: *Bitcoin will eventually be worth zero*. šøš„
Eugene Fama, the *āFather of Modern Financeā*, recently predicted that *Bitcoin* will become worthless in the next decade. *Why*? Well, Fama argues that cryptocurrencies, including Bitcoin, *violate all the rules of a medium of exchange*. š¬
Letās dive in and break down what he said, and how the crypto world fits into the *ānew paradigmā* of market cycles. šš
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*What Fama Says About Bitcoinās Future š„*
On *January 30th*, Fama discussed Bitcoinās future on the podcast *Capitalisnāt*. He shared his belief that *cryptocurrencies* donāt have *stable real value*. š He claims that *highly variable real value* is something *not supposed to survive* in any functional medium of exchange.
Famaās prediction is bold: *Bitcoin will eventually be worth zero*. He argues that because of its *extreme price volatility*, Bitcoin doesnāt meet the requirements to be a reliable currency or store of value. š°
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*The "New Paradigm" of Market Cycles š*
But whatās really interesting is how Famaās thoughts tie into the *market cycle* that we've seen before in both traditional markets and crypto markets. The cycle of hype, crash, and recovery is something many investors have witnessed, and it looks like Famaās prediction is *part of that cycle*.
Hereās how the *market cycle* breaks down in *cryptoās "New Paradigm"*:
1. *Denial*:
At first, people *donāt believe* Bitcoin will ever be anything other than a fad. *Institutions* and *investors* dismiss it as "just a bubble." š§
2. *Delusion*:
As Bitcoin starts rising, people start getting caught up in the hype. āIt can only go up, right?ā But it's also when the risks are *ignored*. š
3. *Greed*:
The market sees gains, and *everyone* wants in! Investors are buying without fully understanding the risks. *Everyone* wants to ride the wave, pushing prices higher. š
4. *Bull Trap/Fear*:
The market starts to show signs of weakness, and the *first sell-offs* begin. People panic, but theyāre still unsure of what's going on. Fear of missing out (FOMO) kicks in. ā ļø
5. *Public Capitulation*:
Once the crash hits, many retail investors *give up*. The price drops, and people feel like Bitcoin is finished. *Media attention* gets even bigger, feeding the fear. š±
6. *Bear Trap/Despair*:
Investors think the worst is over, but prices drop even further. *Despair* sets in, and people question if Bitcoin will ever recover. š
7. *Take-Off*:
The ā*stealth phase*ā begins. The *smart money* moves in quietly, scooping up assets at a discount. Things feel different this time. A *recovery* starts slowly but surely. ā³
8. *Mean/Blow-Off Phase*:
Prices explode in a *blow-off top*, fueled by *media attention*, enthusiasm, and mass adoption. The *mania phase* begins. š¤
9. *Return to Normal*:
After the crash and recovery, the market will eventually *return to its āmeanā*āthe price that reflects the *true value* of the asset. š
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*The Final Word on Bitcoinās Future š¬*
So, what do you think? Is Bitcoin really on its way to *zero* as Fama predicts? š§ Or is this just part of the *market cycle* we see over and over again? š¤·āāļø
While Famaās views are rooted in *traditional finance*, Bitcoin is a whole new animal š¦, and itās been defying predictions since day one.
šØ *To the traders:* Keep your eyes open! If youāre riding the crypto wave, know when to *sell*, and make sure youāre prepared for every phase of the cycle. *No investment is without risk*, and Bitcoin is no exception. š”
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