Professor Damodaran points out that
“The success part of a cryptocurrency is what they’ve done in the market…Bitcoin has soared and markets have treated it very well.”
Today the market capitalization of Bitcoin is around $53 billion. While that is relatively small in comparison to the market capitalization of companies like Amazon or Apple, Professor Damodaran says that this is a respectable number considering Bitcoin's humble origins.
The professor cites characteristics of Bitcoin:
Decentralized verification
Complete and open records
Almost incorruptible
Professor Damodaran makes important conclusions as to why cryptocurrency is not being widely accepted for transactions:
Inertia: Cryptocurrencies are still new and it takes time for people to change their financial habits. It took almost twenty years for debit and credit cards to become widely accepted.
Volatility: Attractive for traders, not so attractive for a medium of exchange.
Competition: With hundreds of cryptocurrencies available, there is competition and confusion.