More than two years after he warned U.S. lawyers that cryptocurrencies are “the mother of all scams and bubbles,” economics professor Nouriel Roubini remains a hater.
“Given that the underlying value of bitcoin is zero and it would be negative if a proper carbon tax were imposed on its highly polluting energy generation, I assume the conventional bubble is coming to end in another body, ”Roubini wrote in a comment column for the Financial Times on Wednesday.
Read: Electricity to power bitcoin goes up to new heights as price rises from Tesla
Since its October 2018 warning, BTCUSD bitcoin,
has surpassed more than 600% and is currently moving up at $ 45,000, up nearly 60% so far this year. A recent higher leg brought bitcoin to $ 48,000 on Tuesday, spurred by a $ 1.5 billion investment from electric car maker Tesla TSLA,
The company also mentioned plans to accept future payments in bitcoins.
Read: Why is Tesla buying bitcoin?
Acknowledging Tesla, Roubini said bitcoins are still “rarely used by legitimate companies. ”It also hurt back to the last bitcoin bubble of 2017-18, when the cryptocurrency went from $ 1,000 to $ 20,000 and then back to $ 3,000.
And don’t even refer to cryptocurrencies as “frontier currencies,” because almost nothing gets a price in them, he said. “They are not a separable payment method: with bitcoin you can make five transactions per second while the Visa network makes 24,000.”
Then there is the volatility, which can wipe out profits within hours and that reliance on cryptocurrency tokens marks a return to the Stone Age, an excavation he did before. Speaking to this modern “Stone Age” cartoon family, he said that even the Flintstones had a “more sophisticated standard based money system” – shells.
Crypto, he said, “is just a play on speculative asset bubbles, worse than tulip-mania, as flowers were and still are. Its source of value against tail risks is unproven. And worse: some cryptos, known as “shitcoins,” are financial lumps in the first place or are lost every day by their sponsor, “said a professor of economics at New University’s Stern Business School. York and chairman of Roubini Macro Associates.
And cryptocurrencies will not “distribute finance, provide banking services to people without a bank, or make a fortune rich,” since bitcoins mining, for example, is largely controlled by oligopolistic miners, in places as far away as Russia, China or Beloruisia.
Read: Most bitcoin investors are ignorant and volatile. They ‘play Russian roulette,’ says this analyst
Neither bitcoin nor its competitors will offer safe haven investors – hedges against inflation, weak currency and tail risks amid loose monetary policy, financial crisis and geopolitical pressures. “Gold, inflation-based bonds, commodities, real estate and even rations are all reasonable candidates,” Roubini wrote.
Comment: This investor in both gold and bitcoin says only one offers real long-term security
Undoubtedly bitcoin has plenty of fans out there, including billionaire investor Mark Cuban, who described some crypto assets as digital sources of value in a blog post in January.
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