NYU Professor Said Bitcoin Failed as a Good Currency

The financial specialist and professor at the New York University – Aswath Damodaran – criticized bitcoin in a recent speech. In his opinion, the primary digital asset “failed miserably” and did not prove itself as a good currency.

Gold and BTC Are Not The Same

The prominent Indian professor – Aswath Damodaran – shared his point of view on bitcoin in the most recent episode of Moneycontrol Masterclass. He asserted that the largest cryptocurrency has failed to classify as a good currency because people disregard it as a payment method for daily and household purchases:

“A good currency, in my view, is one that [is] used to buy coffee, buy your house, buy a car, and on that count, bitcoin has failed, and not just failed, it’s failed miserably.”

Damodaran, also known as “the Dean of Valuation,” believes that crypto enthusiasts ignore bitcoin’s disadvantages only because they have made a lot of money from it.

Speaking about the correlation between gold and the digital asset, the Indian opined that the yellow metal is the true store of value because it holds its price during financial catastrophes. He reminded that this is not the case with bitcoin, whose volatile nature makes it a highly risky investment tool:

“Gold’s biggest claim to fame is that when stocks collapse, gold holds its value. If I use the same test on bitcoin and I look at 2020, bitcoin didn’t behave like a collectible. It behaved like a very risky stock. Put simply, if I add bitcoin to a portfolio of stocks, I’m just adding something that makes my portfolio even more volatile.”

Did BTC Really Disappoint That Much?

And while many critics questioned bitcoin’s merit due to its volatile fiat currency price, MicroStrategy’s CEO – Michael Saylor – asserted that it is a better hedge than gold during these uncertain economic times of increasing inflation. He went further, stating that it outperforms the yellow metal by 50 times:

“I think in the past 12 months, we have all been waiting for inflation, and I think we are seeing it now. I think investors are seeing that bitcoin is up by 330% and gold is up 7% in that period. So, bitcoin is outperforming gold as an inflation hedge by a factor of 50.”

Known as one of the biggest BTC maximalists, Saylor highlighted the cryptocurrency’s merit not only over gold but over all other investment instruments.

Featured Image Courtesy of EconomicTimes