Nobel laureate economist Paul Krugmancompared the current state of cryptocurrencies to previous ‘real estate/housing bubble’ and subprime mortgage crises. Stating that crypto assets do not really have any value, the economist likened cryptocurrencies to ‘a house built on nothing, not on sand’.
Nobel laureate Paul Krugman shared his views in an article published in the New York Times on Monday and discussed the current state of the cryptocurrency in the content.
In 2008, Krugman won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for his analysis of trade patterns and the place of economic activity.”
Krugman, who shared his views by referring to the book and movie The Big Short. He reminded the financial instruments that caused the inflation of housing prices before the financial crisis in 2008. Although such financial instruments raised housing prices for a while, a major collapse followed, triggering the global crisis.
CryptocurrencyContinuing to discuss the current state of cryptocurrencies, the economist quoted the Federal Trade Commission and stated that such crypto assets have become a preferred means of payment by scammers. Krugman, who is also very critical about stablecoins, stated that such assets are neither stable nor a coin. TerraUSD (UST) He referred to his downfall.
Krugman later pointed out that at the peak in November, the total market cap of cryptocurrencies was almost $3 trillion. He added that early investors were making really big profits, famous business schools were offering blockchain courses, and several cities were competing to be the most crypto-friendly.
“It seems extreme and implausible to argue that an asset class that has grown so enlarged, whose supporters have gained so much political influence, may lack real value, that it is a house built on nothing but sand.
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 commented.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.