“Black Swan” famous author of Nassim Nicholas Talebciting the severe drop in liquidity as a potential danger sign for investors. Bitcoin (BTC) expressed concern about the sustainability of his latest rally.
Author of “Black Swan” Points to Declining Bitcoin (BTC) Liquidity as a Red Flag for Investors
Despite the cryptocurrency’s impressive double-digit gains this year, Taleb’s analysis suggests that the market may be on shaky ground as liquidity levels in crypto markets hit a 10-month low.
Bitcoin: a severe drop in liquidity… Past suckers are all “hodling”; few new suckers are coming.https://t.co/F7Ji487VO0
— Nassim Nicholas Taleb (@nntaleb) March 27, 2023
The drop in liquidity has been exacerbated by banking fears lately, with US exchanges the hardest hit due to the shutdown of USD payment channels and crypto banks.
Market makers in the region face unprecedented challenges in their operations. Spreads for USD pairs showed a similar trend, subject to increased volatility as a result of uncertainty in the US.
Taleb has been a strong critic of cryptocurrencies in the past, often highlighting what he perceives as inherent flaws in the crypto concept.
In a previous tweet, Taleb mocked a headline that stated that the price of Bitcoin had fallen due to uncertainty, arguing that this contradicted claims that the cryptocurrency was “not fragile”.
The author also expressed his gratitude for the messages he received from people who claimed to have saved them from investing in Bitcoin, which they believed would result in significant losses.
Despite Bitcoin’s current price increase, Taleb’s warning of dwindling liquidity suggests that investors should remain cautious.
*Not investment advice.
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