The cryptocurrency craze is reminiscent of the housing bubble of the early 2000s, Paul Krugman said in a New York Times op-ed. He warned that the hype surrounding digital coins sounded like people’s unwavering faith in the US housing market before it crashed, triggering the global financial crisis. The BTC/USD exchange rate consolidates slightly above USD 30,000 on Thursday.
- At the time, it just seemed unlikely that the markets could be so wrong, the Nobel laureate recalls
- Krugman insured the cryptocurrency market, which was valued at nearly $3 trillion in November.
- The expert pointed to the lack of practical applications of Bitcoin, questioned the advantage of tokens over conventional means of payment and underlined the popularity of cryptocurrencies with fraudsters.
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We went from Big Short to Big Scam. Nobel laureate skeptical of cryptocurrency market
During the US housing bubble, only a handful of investors – including Big Short’s Michael Burry and John Paulson – believed that house prices had reached unsustainable levels and were, against all odds, confident that they bet against seemingly safe mortgage-backed securities.
Krugman, winner of the 2008 Nobel Prize in economics, recalls that during the housing bubble in the United States, Americans simply could not believe that house prices were as high as the pessimists claimed or grasp that billions of dollars could evaporate from the real estate market. .
– At the time, it just didn’t seem likely that the markets could be wrong – wrote an economics professor and columnist.
Krugman insured the cryptocurrency market, which was valued at nearly $3 trillion in November. He drew attention to Bitcoin’s lack of practical applications, questioned the advantage of tokens over conventional means of payment, and highlighted the popularity of cryptocurrencies among scammers and money launderers. .
The Nobel laureate noted that, like during the housing boom, it was ridiculous to question an asset class that had become so valuable and attracted so many influential developers. To suggest that crypto is “a house built not on sand but nothing” seems absurd, he continued.
– If you ask me, looks like we went from Big Short to Big Scam – he summarized.
Bitcoin (BTC) consolidates over $30,000
BTC/USD has been consolidating around $30,000 since early June. This level of psychological support remains effectively defended by demand, as breaking it could pave the way for a return to this year’s low of $25,400. On the other hand, if you continue moving north, you will need to overcome the resistance around $33,000 before the buyers start looking at the higher levels.
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