Bitcoin has failed miserably as a currency, according to NYC’s Aswath Damodaran

Continuous Bitcoin critics once again dismissed the value proposition of BTC as a form of currency.

Aswath Damodaran, professor of finance at New York University’s Stern School of Business, reiterated his criticism of Bitcoin (BTC). The professor appeared in the 10th episode of the Moneycontrol master class and doubled his long-term negative attitude towards Bitcoin as a currency. According to him, the limited use of Bitcoin in microtransactions runs counter to the idea that Bitcoin is feasible as a form of currency, noting:

“A good currency, in my view, is one that’s 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.” For the New York University professor known as the “dean of valuation” on Wall Street, Bitcoin’s only claim to fame is the returns received by early investors. “When I run into Bitcoin enthusiasts, they seem to push this notion that Bitcoin is a great currency because they’ve made a lot of money on it”

Related: Bitcoin volatility remains a concern for the CEO of the Bank of New York Mellon subsidiary

The New York University professor had previously provided a similar variant of this anti-Bitcoin commentary around that BTC is not a viable form of currency. During the 2017 bull market, Damodaran believes that market capitalization growth is not a suitable indicator for determining Bitcoin’s success.

As early as April, Damodaran identified volatility and high transaction costs as the main obstacles to the viability of Bitcoin as a medium of exchange. However, in the face of financial censorship in many parts of the world, the criticism of the New York University professor did not indicate that the adoption rate of BTC is increasing.

Related: Bitcoin rebounds to more than $30,000 during volatile trading hours

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, during the market turmoil in March 2020, BTC behaved like a high-risk stock.

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 stated that Ether (ETH) is more likely to become a commodity than BTC.

Related: Currently, institutional investors are not buying Bitcoin

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