People have always doubted Bitcoin, but when a Nobel Prize-winning economist said it will eventually fail, many paid attention.

Eugene Fama, known as the “father of modern finance,” thinks that Bitcoin will eventually be worth nothing. What is his reason? Bitcoin has no true value, doesn’t work well for buying and selling, and doesn’t fit within regular banking systems. Does his case make sense?

Bitcoin’s Weaknesses: A Fatal Flaw Or Misunderstood Evolution?

Fama is mainly worried about how unpredictable Bitcoin is. For a currency to work well, it must be stable. Bitcoin changes in value a lot, making it hard for companies to accept it as payment. Fama believes that Bitcoin’s uncertainty makes it difficult to use as a way to buy and sell things.

He also argues that Bitcoin lacks the backing of a central authority. Unlike fiat currencies, which governments support, Bitcoin derives value purely from market speculation and demand. If the demand disappears, the price goes to zero. That’s his core thesis, but is it the whole story?

Nobel Laureate Eugene Fama Predicts Bitcoin Will Become Worthless https://t.co/smpQyoODmh via @ProMarket_org

— The Activist Investor (@activistinvestr) January 31, 2025

The Store Of Value Debate: Is Bitcoin Digital Gold?

Critics of Fama’s argument point out that Bitcoin isn’t just trying to be a currency—it’s evolving into something else. Many see it as digital gold, a store of value immune to inflation and government control. Unlike traditional currencies, Bitcoin has a fixed supply of 21 million coins, making it scarce and potentially deflationary.

NEW: “NOBEL LAUREATE” EUGENE FAMA PREDICTS BITCOIN WILL “GO TO $0 IN 10 YEARS”

What an idiot 🤡 pic.twitter.com/dVz4x4y2ol

— The Bitcoin Historian (@pete_rizzo_) January 30, 2025

In that sense, Bitcoin’s volatility could be a feature rather than a flaw. Gold isn’t used in everyday transactions, yet it holds immense value due to its scarcity and historical trust. If Bitcoin follows a similar trajectory, it may never be widely used for payments—but that doesn’t mean it’s worthless.

What Would It Take For Bitcoin To Go To Zero?

For Bitcoin to truly collapse, a few extreme scenarios would have to unfold. A worldwide ban could crush demand, making it difficult for investors to hold or trade. A technological failure—such as a catastrophic bug in the Bitcoin protocol—could undermine trust. Or a superior alternative could replace it.

But history suggests Bitcoin is resilient. It has survived multiple crashes, regulatory crackdowns, and criticisms from financial heavyweights. Each time, it has bounced back stronger. Could Fama be right in the long run? Possibly. But betting against Bitcoin has proven to be a losing game so far.

The Verdict: A Polarizing Future Ahead

Bitcoin’s future remains uncertain, and opinions are as divided as ever. While some believe it’s doomed, others see it as a revolutionary financial instrument. The reality? Bitcoin is still evolving, and its fate will depend on adoption, regulation, and market forces.

Featured image from City AM, chart from TradingView

The latest on-chain data shows that the Bitcoin network activity has been waning over the past few months, with the blockchain metric reaching a new low recently.

Why Is The Bitcoin Network Activity Falling?

In a new post on the X platform, CryptoQuant head of research Julio Moreno discussed how Bitcoin is witnessing an unusual period of low transaction activity, with the mempool almost empty and transaction fees falling to 1 sat/vB. This represents the lowest level of network activity since March 2024, indicating a notable decline in on-chain demand.

For context, the mempool refers to a temporary storage area where pending Bitcoin transactions await processing. The mempool usually remains congested during periods of elevated on-chain demand and network activity. However, new on-chain data shows that most transactions have been confirmed, leaving the mempool nearly empty.

Source: JJCMoreno/X

A nearly empty mempool is a rare phenomenon often associated with waning on-chain activity or shifting market dynamics. According to Moreno, the major contributor to this decline is the fading excitement around Runes and BRC-20 tokens.

Runes and the BRC-20 token standard are protocols that enabled the creation and minting of fungible and non-fungible tokens on the Bitcoin blockchain. While these protocols were met with significant hype upon launch, the initial excitement didn’t translate to sustained use.

Source: JJCMoreno/X

However, at the peak of the Runes and BRC-20 frenzy, the number of confirmed transactions on the Bitcoin network crossed the 1.5 million milestone in a single day. Specifically, the pioneer blockchain processed over 1.6 million unique transactions between sender and receivers on April 23, 2024, with the launch of Bitcoin Runes playing a pivotal role.

The decline in transaction count has broader implications for various components of the pioneer blockchain, including miner revenues. Miners rely on transaction fees as another source of income, especially as block rewards have been further slashed since the recent halving event. Hence, an extended period of low fees could impact mining profitability, potentially influencing network hash rate distribution.

Implications On BTC Price

An almost-empty mempool and low transaction activity are not exactly the best combinations for positive price action. Specifically, it could suggest low speculative interest and reduced investor enthusiasm, leading to a consolidation of the Bitcoin price.

As of this writing, BTC is valued at around $100,450, with a nearly 2% decline in the past 24 hours. According to CoinGeko data, the premier cryptocurrency has lost roughly 3.5% of its value in the last seven days.

The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image created by Dall-E, chart from TradingView

Bitcoin has dropped below the $100,000 threshold as the broader crypto market experiences heightened volatility.

This downturn coincides with a significant decline in transaction activity on the Bitcoin network, bringing memory pool (mempool) volume to its lowest level since March 2024.

Market Downturn Wipes Out Over $500 Million in Liquidations

Over the past 24 hours, Bitcoin fell below $100,000, shedding over 4% of its value and briefly touching $98,000. Data from BeInCrypto indicates that Bitcoin initially peaked at $102,000 before succumbing to selling pressure.

The decline follows broader market instability, with the total crypto market cap losing 5% of its value. Other major cryptocurrencies also faced steep declines. Ethereum, Solana, and BNB each recorded losses exceeding 7%.

The increased volatility triggered a liquidation spree, wiping out over $555 million in leveraged positions, according to CoinGlass. More than 239,000 traders faced forced liquidations, with long traders—those betting on price increases—suffering the heaviest losses, amounting to $491 million.

Short traders, anticipating price declines, lost approximately $63 million.

The turmoil follows US President Donald Trump’s decision to enforce stringent tariffs on major trading partners, including Canada.

The administration claims the move is designed to curb the flow of undocumented immigrants and illicit substances into the US. However, the tariffs have sparked concerns about inflationary pressure on American consumers.

In response, Canadian Prime Minister Justin Trudeau announced retaliatory measures, imposing 25% tariffs on $106 billion worth of American imports.

The first round of levies, targeting $30 billion in goods, will take effect immediately, with an additional $125 billion in tariffs scheduled in the coming weeks.

Bitcoin Network Sees Sharp Drop in Transactions

Beyond market turbulence, Bitcoin’s network activity has declined significantly, with the mempool—the waiting area for unconfirmed transactions—showing a notable reduction in volume.

On February 1, data from CryptoQuant shows that the mempool is nearly empty, indicating a steep drop in transaction volume. The data further reflects that Bitcoin transaction fees have dropped to 1 sat/vB, signaling reduced demand for block space.

This marks the lowest level of transaction activity since March 2024.

This trend raises concerns about Bitcoin’s usage as a medium of exchange, with some analysts suggesting that the growing perception of BTC as digital gold may discourage transactional use.

Bart Mol, host of the Satoshi Radio Podcast, criticized the shift in narrative, stating that celebrating an empty mempool overlooks the potential risks to Bitcoin’s foundational role. He likened it to “wood rot” in a house’s foundation, warning that a lack of transaction activity could undermine Bitcoin’s core functionality.

“Bitcoiners celebrating that the mempool cleared is one of the most retarded things I’ve seen in a while. The digital gold narrative is slowly destroying the foundation of Bitcoin, like wood rot in the foundation of a house,” Mol wrote.

Indeed, Mol’s comment aligns with Bitcoin’s increasing adoption as a reserve asset. Several corporations and governments have begun considering Bitcoin for their treasuries. These narratives reinforce the token’s position as a long-term store of value rather than a transactional currency.

However, the ongoing decline in on-chain activity raises questions about Bitcoin’s long-term utility beyond being a digital gold reserve.