Nassim Nicholas Taleb, author of bestselling book “The Black Swan,” has called bitcoin a “gimmick” in an interview with CNBC. He thinks the cryptocurrency exchange rate is too volatile to be an effective currency and that it is not a safe lever against inflation.
“In principle, there is no relationship between inflation and bitcoin. None. You can have hyperinflation and the bitcoin going to zero. There is no connection between the two, “said Taleb.
“It is a beautifully designed cryptographic system. It’s well made, but there’s absolutely no reason to link it to anything economic, “Taleb added.
He said bitcoin has characteristics of what he calls “open and bare Ponzi fraud.”
A Ponzi scheme is a form of fraud in which scammers steal money from investors and mask the theft by diverting proceeds to customers from funds contributed by newer investors. By the way, one of the greatest Ponzi scammers in Wall Street history has recently passed away. Price prediction crypto Spain is popular.
Ever positive, now: “pure speculation”
Taleb was once positive about bitcoin, which was created in 2009 and is the largest crypto currency in the world by market value. However, he said he was “fooled” by it because he thought it could evolve into a currency used in transactions.
“Something that moves 5 percent a day, 20 percent in a month – up or down – can’t be currency. It’s a different matter, “said Taleb, who is a former derivatives trader and now works as a scientific advisor to leveraged fund Universa Investments.
“I bought into it… not to realize an increase in value, but to have an alternative to the fiat currency issued by central banks: A currency without government,” Taleb said. “I realized it was not a currency without a government. It was just pure speculation. It’s like a game … I mean, you can create another game and call it a currency. ”
While some companies accept bitcoin as payment for goods and services, including Tesla, there are also those in the crypto community who think it is actually a security. Bitcoin, whose stock is capped at 21 million tokens, is described as “digital gold.” Website for Crypto Netherlands is popular.
$ 1 million gimmick
The price of bitcoin has indeed risen in recent months – from less than $ 11,000 per unit in October to a historic high of nearly $ 65,000 last week. Increased institutional acceptance is cited as a factor in the increase.
In keeping with its propensity for wild price swings, bitcoin plummeted in the days since, eventually breaking below $ 50,000 a token on Friday. This was down 23 percent in just over a week. However, the price is still up more than 70 percent so far, according to crypto Coindesk.
Bitcoin has gotten long-term price targets between $ 400,000 and $ 600,000 per token from some top investors, including Scott Minerd of Guggenheim Partners; others have predicted even higher than that.
Taleb suggested that the price of bitcoin does not determine his now critical opinion, saying that “bitcoin could go to $ 1 million” and that it would not change his argument. “These are gimmicks. You have bitcoin today. You might have another tomorrow. They come and go, and there is no systematic link between the gimmicks and the claims they make, “he added.
Investors concerned about inflation are better off buying real estate than investing in bitcoin, Taleb said. “If you want to hedge against inflation, buy a piece of land. Grow -for example- olives on it. Then you have olive oil. When the price collapses, you have something. ”
“But bitcoin, there is nothing concrete about it. And, of course, the best strategy for investors is to own things that will yield returns in the future. In other words, you can fall back on real dollars coming out of the company, “it said.
Taleb is known for his spicy sayings. He calls most journalists “intellectuals yet idiots”. He lashed out at Elon Musk last year for minimizing “corona hysteria,” and regularly engages in a Twitter conflict with opponents. One of his best friends is flamboyant evolutionary psychologist Gad Saad.
In his 2007 bestseller “The Black Swan,” Taleb explored highly unlikely events and their potential to cause dire consequences.