Aswath Damodaran, professor of finance at the Stern School of Business at New York University, reiterated his criticism of Bitcoin (Bitcoin).
Appeared in episode 10 of the Moneycontrol master class program, The New York University professor doubled down on his long-standing denial of Bitcoin as a currency.
According to Damodaran, the limited use of Bitcoin in microtransactions runs counter to the claim that Bitcoin is feasible as a form of currency, noting:
“In my opinion, a good currency is the currency used to buy coffee, houses, and cars. In this regard, Bitcoin has failed. Not only has it failed, but it has failed miserably.”
For the New York University professor known as the “dean of valuation” on Wall Street, the only reason for Bitcoin’s rise to fame is the returns received by early investors. “When I met Bitcoin enthusiasts, they seemed to promote the idea that Bitcoin is a good currency because they have made a lot of money through it,” Damodaran said.
The New York University professor had previously provided similar anti-Bitcoin comments about BTC not being a viable form of currency.During the 2017 bull market, Damodaran believes that the market value has increased Not a suitable indicator Determine the success of Bitcoin.
As early as April, Damodaran identified volatility and high transaction costs as Major obstacles The feasibility of Bitcoin as a medium of exchange. However, in the face of financial scrutiny in many parts of the world, the criticism of the New York University professor did not indicate the increasing adoption rate of BTC.
In addition to treating Bitcoin as a currency, Damodaran also disagrees with the idea that Bitcoin is a hedge against inflation. According to a professor at New York University, BTC behaved like a high-risk stock during the market turmoil in March 2020.
Damodaran did not mention that the price of Bitcoin increased by 7 times at the end of 2020, instead of the Black Thursday crash in March 2020.
The professor’s shift from criticizing Bitcoin as a currency to denying it as an asset class also seems to be an emerging theme. As early as May, Damodaran said Ether (Ethereum) Standing A greater chance of becoming a commodity Than Bitcoin.