Key Words: Don’t fall for the bitcoin bubble, even the Flintstones had a better system, warns economist Nouriel Roubini

Key Words: Don’t fall for the bitcoin bubble, even the Flintstones had a better system, warns economist Nouriel Roubini

2021-02-10 18:04:00
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More than two years later warning US lawmakers that cryptocurrencies are "the mother of all scams and bubbles", economics professor Nouriel Roubini remains a hater.

“Since bitcoin's fundamental value is zero and would be negative if a proper carbon tax were imposed on its massive polluting power-generating production, I predict that the current bubble will eventually end in another failure,” Roubini wrote in a statement. opinion column for the Financial Times on Wednesday.

Read: Electricity to power bitcoin soars to new heights as the price gets a Tesla boost

Since its October 2018 warning, bitcoin
BTCUSD,
-4.95%

is up more than 600% and is currently hovering at $ 45,000, close to 60% so far this year. A recent higher leg briefly brought bitcoin to $ 48,000 on Tuesday, fueled by a $ 1.5 billion investment from electric carmaker Tesla
TSLA,
-4.55%
.
The company also referred to plans to accept future payments in bitcoins.

Read: Why does Tesla buy bitcoin?

Roubini acknowledged Tesla, saying that bitcoins are still "hardly used by legitimate companies." It also hiked back to the latest bitcoin bubble of 2017-18, as the cryptocurrency went from $ 1,000 to $ 20,000 and then back to $ 3,000.

And don't even call cryptocurrencies "currencies" because almost nothing is priced in them, he said. "It's not a scalable means of payment: with bitcoin you can make five transactions per second while the Visa network does 24,000."

Then there's the volatility, which can wipe out profits in hours and the fact that relying on cryptocurrency tokens marks a return to the Stone Age. an excavation he made earlier. He called that cartoon family of the "modern stone age" and said that even the Flintstones had "a more sophisticated monetary system based on a checkpoint" – shells.

Crypto, he says, is “just a play on a speculative asset bubble, worse than tulip mania, as flowers had and still have a use. The store of value against tail risks has not been proven. And worse, some cryptos, called '' shitcoins' 'are primarily financial scams or humiliated daily by their sponsor,' said the economics professor at the Stern School of Business of the United States. New York University and President of Roubini Macro Associates.

And cryptocurrencies will not "decentralize finances, provide banking services to those without a bank, or make the poor rich" because bitcoin mining, for example, is largely controlled by oligopolistic miners, in remote places like Russia, China or Belarus. Russia.

Read: Most bitcoin investors are inexperienced and shy of volatility. They & # 39; play Russian roulette & # 39 ;, said this analyst

Neither bitcoin nor its rivals will provide what investors are looking for a safe haven – hedges against inflation, weak currencies and tail risks amid loose monetary policy, financial crisis and geopolitical stress. "Gold, inflation-based bonds, commodities, real estate and even stocks are all reasonable candidates," Roubini wrote.

Opinion: This investor in both gold and bitcoin says only one offers true long-term security

Bitcoin no doubt has many fans, including billionaire investor Mark Cuban, who described some crypto assets as digital stores of value in a blog post from January.

Read: Should I buy dogecoin? Why Cryptocurrency Prices Are Rising – But Risky

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