Nobel laureate Paul Krugman compares crypto with housing bubble and subprime crisis – Economy Bitcoin news

Nobel laureate Paul Krugman compares crypto with housing bubble and subprime crisis – Economy Bitcoin news

Nobel laureate in economics Paul Krugman compared the current state of cryptocurrency to the housing bubble and the subprime mortgage crisis. Noting that cryptocurrencies lack any real value, he said: “It is a house built not on sand, but on nothing.”

Paul Krugman on the collapse of the crypto, housing bubble and subprime mortgage

Nobel laureate Paul Krugman in one opinion discussed the current state of cryptocurrency piece published Monday in the New York Times.

Krugman received the Sveriges Riksbank Prize for Economic Sciences in 2008 in memory of Alfred Nobel “for his analysis of trade patterns and locations of economic activity,” according to the Nobel Prize website.

He began by referring to The Big Short, a book and film that tells the story of investors betting on “the assumption that the huge rise in apartment prices in the years before [2008 global financial] the crisis was a bubble and that many of the seemingly sophisticated financial instruments that helped inflate housing would eventually be revealed as worthless rubbish, ”the economist described, adding:

It just didn’t seem convincing that markets and the conventional wisdom that says markets are okay can be so wrong. But they were.

Continuing to discuss the “current state of cryptocurrencies”, he quoted the Federal Trade Commission (FTC) stating that cryptocurrency is becoming a payment option for many fraudsters. He also mentioned the collapse of the algorithmic stabilcoin terrausd (UST), stating that “stablecoin” is “neither stable nor a coin”.

Krugman then pointed out that at its peak in November, the total market value of cryptocurrencies was almost $ 3 trillion. He added that early investors made huge profits, reputable business schools offer blockchain courses, and several cities are competing to become the most suitable for cryptocurrencies.

The Nobel Prize-winning economist believes:

It sounds extreme and unbelievable to suggest that a class of property that has become so large, whose promoters have gained so much political influence, could lack any real value – that it is a house built not on sand, but on nothing.

“But I remember the housing bubble and the subprime crisis. And if you ask me, it looks like we went from Big Short to Big Scam, ”he concluded.

What do you think of Paul Krugman’s comments? Let us know in the comments section below.

Nobel laureate Paul Krugman compares crypto with housing bubble and subprime crisis – Economy Bitcoin news

Kevin Helms

A student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in the security of Bitcoin, open source systems, network effects and the crossroads between economics and cryptography.




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