Bitcoin Correction Fuels Criticism: Economist Hanke Labels BTC as 'Worthless Asset'

Hanke Attacks Bitcoin Again

Renowned economist Professor Steve Hanke has once again taken a strong stance against Bitcoin. After Bitcoin's price fell from around $90,000 to the current $87,298, the Johns Hopkins professor wrote on X: "Bitcoin is a highly speculative asset without value" ^[1].

This is not the first time Hanke has railed against the leading cryptocurrency. Back in July, he criticized companies investing in Bitcoin, claiming that Bitcoin treasuries have no business model because BTC lacks fundamental value ^[1].

Community Contradicts Professor

Reactions from the crypto community were swift. Analyst Axel Adler Jr. countered on X: "Steve, this statement is absolutely false," adding: "Bitcoin is currently in a correction phase after three years of growth" ^[1].

Adler also offered the professor some advice: "I'm afraid you won't live to see the moment when BTC becomes a new asset class and emerges as a key element of the global financial system, but you can take action today to ensure this outcome, and it will certainly shape your children's future" ^[1].

Macroeconomic Uncertainty Weighs on Market

The crypto market experienced a correction on Monday, with Bitcoin testing the $85,000 mark and Ether falling to $2,900 ^[2]. Traders became more risk-averse after a survey showed deteriorating economic conditions in the United States and investor expectations changed regarding options for the next US Federal Reserve chair ^[2].

A CNBC survey found that 41 percent of Americans plan to spend less during the holidays this year, compared to 35 percent in 2024. Additionally, 61 percent of respondents cited affordability issues due to stagnant wages amid rising prices ^[2].

Leverage and AI Bubble Fears

Excessive leverage in the crypto market remains a major concern, with futures open interest standing at $135 billion. Over the past 24 hours, leveraged long positions worth more than $527 million were liquidated ^[2].

Weakness in the artificial intelligence sector has also prompted traders to increase their cash positions and exit riskier asset classes such as cryptocurrencies. Hedge fund giant Bridgewater Associates stated, according to Reuters, that tech companies' heavy reliance on debt markets to finance AI investments has reached a dangerous phase. "Going forward, there is a reasonable probability that we will soon find ourselves in a bubble," wrote Bridgewater's Co-Chief Investment Officer Greg Jensen in a note ^[2].

Long-Term Performance Despite Criticism

Despite the current correction and ongoing criticism, Bitcoin remains one of the best-performing assets in human history over the long term. BTC has gained an average of 31 percent per year over the past five years ^[1].

The US Dollar Index (DXY) found support at the 98 mark after four consecutive weeks of decline. This stability suggests greater confidence in the US government's ability to avoid a recession, which is supportive for the stock market but less favorable for cryptocurrencies ^[2].