The cryptocurrency market has been turbulent for several days. Paul Krugman, a Nobel laureate in economics who has always called himself a “cryptocurrency skeptic” , published an op-ed in the New York Times earlier today (7), saying that cryptocurrencies are a “Scam” and compared it to the housing bubble that ignited the global financial crisis in 2008.
In the op-ed titled “From the Big Short to the Big Con,” Kruman asked:
Remember “The Big Short”? Michael Lewis’ 2010 book, adapted into a 2015 film, is set during the 2008 global financial crisis and tells the story of several investors making big bets that “high house prices are a bubble” and many seemingly complex financial instruments Will eventually be revealed as worthless garbage.
“While there is clear evidence that house prices are already too high, who would have expected house prices to be so crazy,” he wrote .
Never thought that the market would be hit so hard, and that the idea that the market is okay would be so wrong, it all seems irrational, but it is, and this is the current state of cryptocurrencies.
Kreuman noted that cryptocurrencies are used for fraud , according to the U.S. Federal Trade Commission (FTC) , and questioned their real-world utility.
Last week, the U.S. Federal Trade Commission reported that “cryptocurrency is fast becoming the payment method of choice for many scammers,” which is impressive given its small role in ordinary transactions.
He continued, “If cryptocurrencies are the future, then why has Bitcoin, which was introduced as early as 2009, still not seen any significant real-world use.” He also wondered if cryptocurrencies have any other uses besides being illegal. Other “legitimate use cases”.
An asset class that has grown so large that you now say it may lack any real value, saying it is not a house built on sand, but a house built “out of thin air”. It sounds extreme and unbelievable
He concluded by saying, “But I still remember the housing bubble and the subprime mortgage crisis. If you asked me how I felt, I would say, it looks like we’ve gone from a big short to a big scam now.”