Is gold or bitcoin the better investment? Opinions vary widely, with billionaire Mark Cuban supporting bitcoin and Euro Pacific Capital CEO Peter Schiff disagreeing.
This week, Naseem Nicholas Taleb, author of the 2010 New York Times best-selling black swan One of the few who foresaw the financial crisis of 2007-2008, Interview French weekly magazine re-express.
It’s fair to say that Bitcoin, which has fallen more than 60% since the beginning of 2022, has failed to impress him.
“Technology Comes and Goes”
One of the problems with bitcoin, he says, is that “you can’t be sure about the interests, mindsets, and preferences of future generations. Technology comes and goes, but at least the physical gold remains.” Left unchecked, Bitcoin will inevitably collapse.”
Furthermore, he said: “
When asked about the origins of the “cryptocurrency frenzy,” he points to the low interest rates of the past 15 years.
“Rate cuts don’t necessarily help the economy, they create asset bubbles,” he said. “Capital no longer costs anything, and the risk-free return on investment is too low, even negative, and drives people to speculation. It’s the end of real finance.”
One result, he claimed, was a “bitcoin-like malignancy.”
“All Bubbles”
Taleb isn’t the only one looking at the impact of what he calls “the bubble of all things.” This bubble was created by years of loose monetary policy by his Fed and other central banks after the global financial crisis.As luck As reported this week, the easy money era was filled with bulls, from crypto pundits to hedge fund managers, economists to investment bankers, who believed the good times would never end.
Interestingly, Taleb was an early supporter of Bitcoin. As he explained at the time, re-expresswas critical of then-Fed Chairman Ben Bernanke.
Bernanke said he was unaware of the structural risks to the system before the 2008 financial crisis and then overreacted. I mistakenly thought Bitcoin would be a bulwark against this distortion of monetary policy. “
“Manipulators and Deceivers”
Taleb also warned that “the world of cryptocurrencies attracts manipulators and scammers.”
He is certainly not alone.
Coinbase CEO Brian Armstrong said at the a16z crypto Founder Summit in late November: And it’s a real shame. It does not mean that it is representative of the industry as a whole. “
(Armstrong added that he was “baffled” why FTX founder Sam Bankman-Fried had not yet been taken into custody. A few weeks later, he was taken into custody.)
Taleb murmured This week, he was trolled and maligned for his criticism of cryptocurrencies, but such attacks are offset by “many messages of thanks for saving young people from bitcoin.”
He shared a message in which a Twitter user said he was about to buy bitcoin but started following Taleb’s thoughts on it, writing: Then it actually failed. NNT saved his father’s hard-earned money. “
Meanwhile, many Bitcoin bulls remain bullish. Her CEO of Ark Invest, Cathie Wood, recently reiterated her prediction that Bitcoin will hit $1 million by 2030, but now she’s just under $17,000. She also claimed Bankman-Fried didn’t like “transparent and decentralized” bitcoin and said the FTX debacle was caused by “opaque centralized players.”
As for Cuban, he is Bill Maher’s club random In last month’s podcast, “I want Bitcoin to go lower so I can buy more”.
Our new Weekly Impact Report newsletter examines how ESG news and trends are shaping the roles and responsibilities of today’s executives. Subscribe here.
