Nouriel Roubini, the New York-based economist, and professor at the NYU Stern School of Business has a reputation for offering analyses that others may not want to hear. After all, his nickname--"Dr. Doom"--didn't come about by accident. Roubini successfully predicted the 2008 financial crisis at a time when hardly any other economists or analysts expected such a financial disaster. More recently, though, Roubini has made headlines for his outspoken position against digital currencies and the blockchain industry. On October 11, 2018, Roubini continued his campaign as he testified before members of Congress, saying that cryptocurrencies were the "mother and father of all scams and bubbles," according to CNBC.
Dangers of the Bubble
Roubini described his earliest concerns about a cryptocurrency bubble as having emerged late in 2017, as the price of bitcoin reached a high close to $20,000. At the time, he said that "literally every human being [he] met between Thanksgiving and Christmas of 2017" asked him for advice on whether or not to buy digital tokens, Roubini told the U.S. Senate Committee on Banking, Housing, and Community Affairs.
Roubini cautioned that the hype surrounding cryptocurrencies may have been particularly dangerous because it drew in "folks with zero financial literacy," prompting even "individuals who could not tell the difference between stocks and bonds" to go into a "manic frenzy of bitcoin and crypto buying," he explained.
The Advent of the "Crypto-Apocalypse"
Roubini criticized "scammers, swindlers" and others in the cryptocurrency community for enticing unwitting investors with "scammy crappy assets at the peak that then went into a bust and crash." The economist described the period in 2018 in which bitcoin and other digital tokens have fallen to a small fraction of their earlier value as a "crypto-apocalypse."
Even though he shared his opinion that the significant majority of digital currencies are "worth zero," Roubini added that he's "not against [the cryptocurrency industry," saying that he's "open to any type of innovation." Nonetheless, the economist has been especially hesitant because of what he perceives to be a significant bubble.
Many other prominent economists and Wall Street leaders have also echoed Roubini's criticisms of digital tokens, although few have been as outspoken about their negative feelings regarding the industry. Nonetheless, there remains a significant group of supporters of digital currencies, including individuals who believe that cryptocurrencies are continuing to evolve to deal with issues that have plagued the industry in its earliest stages.
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