Nobel Prize-winning economist Paul Krugman is unstable in his statement. cryptocurrency made an important warning about the market. Krugman likened the cryptocurrency market to the mortgage crisis of the late 2000s.
In his statement to the NY Times, Krugman said that he saw “disturbing parallels between the cryptocurrency market and the US mortgage crisis.” With the mortgage collapse, the real estate sector had a hard time and the 2007-2008 global economic crisis emerged. At that time, housing loans with high interest rates were given to people who did not have good credit scores in the USA.
Krugman: “Cryptocurrency Market and Mortgage Crisis Have Worrying Similarities!”
Krugman said that there are disturbing similarities between the crisis experienced 15 years ago and the cryptocurrency market. During the crisis in question, banks gave loans to high-risk individuals when interest rates were low and house prices were high. When the market became saturated, banks suffered huge losses due to homeowners who did not pay their debts.
According to Krugman, crypto investors are also led to speculative financial products, similar to the crisis at the time, without fully understanding the risks involved. Investors entering this sector without any idea will cause the system to collapse and cause irreversible losses.
However, Krugman’s bitcoin Let us remind you that it is anti-Semitic and likened BTC to a kind of Ponzi scheme in the past.
According to Krugman, borrowers were not aware of what they would face in the mortgage crisis. The famous economist stated that the cryptocurrency market, which is the scene of high price fluctuations, is a very risky asset class.
*Not investment advice.