As Bitcoin (BTC) matures, proponents have maintained that the digital asset has the potential to replace fiat currencies, having already found use cases as a legal tender in El Salvador.
However, Professor of Applied Economics at Johns Hopkins University, Steve Hanke, has reiterated his longstanding view on Bitcoin, noting its incapacity to take on fiat currencies or precious metals such as gold. He made these remarks during an interview with David Lin, published on May 12.
Hanke likened the possibility to what he termed a ‘sideshow in Las Vegas.’ His sentiments coincide with a period in which institutional investors have increased their allocation in Bitcoin, especially with the rollout of exchange-traded funds (ETF).
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“We’re talking about a sideshow that occurs in some places like Las Vegas. As I’ve said since day one, Bitcoin is a highly speculative asset with zero fundamental value,” he said.
It should be remembered that Hanke was highly critical of El Salvador’s adoption of Bitcoin as a legal tender, warning that the move could lead to an economic collapse. As reported by Finbold, the renowned economist suggested that countries involved in approving Bitcoin are closely related to corruption.
Bitcoin is a ‘non-event’
Hanke’s comments were echoed by fellow economist Peter Schiff, who also participated in the interview. Schiff dismissed Bitcoin as a “non-event,” labeling it a sideshow with little relevance in the broader financial landscape.
“It’s important to the people who have bought it, and they’re going to end up losing a lot of money if they don’t sell it. But somebody’s got to get caught holding the bag because somebody’s going to own it when the music stops,” Schiff said.
Schiff’s skepticism extended to Bitcoin’s potential to replace traditional assets like gold or fiat currencies.
“Central banks are not going to buy it,” he asserted. “It’s not going to replace gold, let alone any of these fiat currencies,” he added.
Notably, Schiff has also been critical of Bitcoin, questioning its true value and terming it a failure based on factors such as transaction costs.
The gold bug has noted in the past that Bitcoin might face a “catastrophic crash” due to large amounts of BTC entering into spot ETFs, making it more vulnerable, as BTC ETF buyers are unlikely to be true believers.
In the meantime, Bitcoin is facing bearish pressure and resistance at $65,000. By press time, BTC was trading at $61,183.
