BTC, a failed currency – New York University
2 min readTL;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 BTC a failed currency.
The know BTC critic said this during an interview on episode 10 of the Moneycontrol Masterclass program.
The finance professor emphasized BTC’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 BTC 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 BTC enthusiasts, they seem to push this notion that BTC is a great currency because they’ve made a lot of money on it,” Damodaran said.
Other points raised by Damodaran why BTC 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 ETH 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.
