Bitcoin

Steve Hanke, professor of applied economics at Johns Hopkins University, has criticized bitcoin, stating it is not a currency. The economist, known for his vocal opinions about crypto and for the promotion of dollarization initiatives in Latam, blasted bitcoin, saying it has a “fundamental value of zero,” and that it is a “highly speculative asset.”

Steve Hanke Criticizes Bitcoin’s Function and Value

Steve Hanke, professor of applied economics at Johns Hopkins, has criticized bitcoin and its value in one of his latest tweets. The economist, known to be very vocal about the negative effect that crypto can have on world economies, contested bitcoin’s utility, stating:

Bitcoin is not a currency. It’s just a highly speculative asset with a fundamental value of zero.

Hanke illustrated his opinion with a cartoon drawn by Robert Rich, as part of his work for Hedgeye Risk Management, where he compares other main fiat currencies including the dollar, the yen, and the euro, with bitcoin.

Bitcoin Community Responds

Responses from the bitcoin community to Hanke’s opinions came quickly. Digital artist Lucho Poletti, known for his bitcoin-focused work, tweeted a similar cartoon that depicted bitcoin as a better form of money than the fiat currencies that appeared in Robert Rich’s cartoon.

Others criticized Hanke’s opinion in writing, like Dr. Julian Hosp, CEO of decentralized finance app Cake Defi, who countered Hanke’s view, declaring:

Bitcoin has utility. We can argue how much, but it is definitely >0. There are undoubtedly some people who want its utility. Lastly, it is provably rare. Hence, your statement that bitcoin has zero value is 100% incorrect.

Hanke, as a promoter of currency boards and dollarization as a solution for inflation and devaluation problems in countries like Argentina, has criticized the adoption and function of bitcoin several times.

In June 2021, Hanke blasted the adoption of bitcoin in El Salvador as legal tender, saying it could cause the collapse of the country’s economy. At the time, he stated that all the dollars in El Salvador could be “vacuumed out” of the country, leaving citizens with only bitcoin.

This criticism intensified in October 2021, when he stated that Nayib Bukele, the president of El Salvador, was “playing fast and [loose] with El Salvador’s tax dollars again,” when he announced buying the bitcoin dip while purchasing 150 bitcoin.

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What do you think about Steve Hanke and his criticism of bitcoin adoption and its fundamental value? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

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