Bitcoin is ‘Millennial Gold’ now, says Aswath Damodaran

What did Indians do 100 years ago? Or 50 years ago? Aswath Damodaran is Professor of Finance at the Stern School of Business at New York University.

He said that real estate was not an asset that could be traded. It behaves now like stocks. I believe the main reason why you’ve seen the rise in cryptocurrencies and non-fungible tokens (NFTs), is because ‘you are looking for a place to put your money. Damodaran said that Bitcoin is millennial gold.

Damodaran is the person to call when you have questions about valuation. He has been called “Wall Street’s dean for valuation” on numerous occasions. He has often described Bitcoin as a millennial’s gold, and he has done so on numerous occasions.

“If you’re 35 years old and have lost your faith, you can no longer buy gold. This was for your grandparents and parents. He said in an interview that he was going to purchase bitcoin.

Damodaran is a long-time anti-cryptocurrencies sceptic. He stated that Bitcoin had become a safe haven for people who don’t trust central banks, governments and fiat currencies in 2017. He explained that Bitcoin plays the same role as gold in the past for those who fear centralised authority.

He wrote that ‘It’s interesting that the language for Bitcoin is filled with mining terminology since that suggests that either intentionally or not, the creators Bitcoin shared this vision’ in his blog in 2017.

He gave three possible outcomes for Bitcoin. He had compared Bitcoin’s ‘catastrophe’ to Tulip Bulbs (a speculative asset that saw its prices soar in the 1600s in Holland before collapsing). He said that Bitcoin is like a shooting stars, drawing in money from those who view it as a source for profit. Then it explodes like a shooting star, and traders move on to “something new and better”.

“There are many possible outcomes right from disaster. Despite its bullishness, this market is still a market where 10-15% of people believe that catastrophe is imminent. No financial asset class will meet your criteria if you believe that catastrophe is imminent. He said that they all would look overvalued.

He said that Bitcoin will eventually have the same power as gold if it does. It will rise during crises and fall in more optimistic times.

“So, in a strange manner, everything is connected with everything else. Markets cannot be understood in isolation. He explained that this is a market where we need to show how everything connects, to CNBC-TV18.

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