"Dr. Doom" Nouriel Roubini Says Bitcoin Is The "Biggest Bubble In Human History"

NYU economist Nouriel Roubini - aka "Dr. Doom" - has long been a cryptocurrency skeptic. So it's hardly surprising that he delighted in bashing the cryptocurrency during an appearance on Bloomberg TV Friday, where he said the bitcoin boom that carried the price of a single token to $20,000 late last year was "the biggest bubble in human history" and that this "mother of all bubbles" is finally crashing..

And, of course,

And it's not just Bitcoin, Roubini added. There are more than 1,300 cryptocurrencies or ICOs, and “most of them are even worse” than the largest digital token. These constitute a “a bubble to the power of two or three,” he said.

Furthermore, while many of bitcoin's critics (Warren Buffett, Ray Dalio, Jamie Dimon - though Dimon later recanted) have clarified that they see value in "blockchain technology", which many have proclaimed has the potential to change the world by disrupting industries as diverse to Wall Street and health care.

Blockchain has “been around for 10 years, and the only application is cryptocurrencies, which is a scam,” the New York University economist added.

Roubini added that bitcoin "is an environmental disaster." As we pointed out late last year, bitcoin mining already consumes more energy than 12 US states.

* * *

After breaking below $8,000 for the first time since November earlier today, bitcoin and other cryptocurrencies aggressively rebounded from a selloff that sent bitcoin lower by roughly 30% at its nadir.

 

Chart

Still, bitcoin is on track to book its worst week since 2013...

bitcoin

 

Comments

tmosley ThinkerNotEmoter Fri, 02/02/2018 - 19:29 Permalink

Hyperbole. Clearly the internet bubble and housing bubbles were both larger, to say nothing of the bond bubble and current stock bubble.

But it has been more profitable for its participants than most of the bubbles in history. Certainly has been for me.

The bubble will burst, and the best coins will survive and thrive and form a stable foundation for a new economic system based on voluntarism rather than mass theft and coercion.

In reply to by ThinkerNotEmoter

Citxmech tmosley Fri, 02/02/2018 - 20:59 Permalink

Or put other ways: "Real estate was in a bubble, so investing real estate will always be a shitty investment"; or "The .coms were experienced a bubble, so you shouldn't invest in anything that touches the Internet ever."

Yes, fraud, manipulation, and greed have over-driven the market for cryptos.  Yes, most of the cryptos out there are attempting to fit square crypto solutions into problems with round holes.   Yes, the entire crypto market will experience a dramatic collapse.  And finally, yes, a leaner, more focused, and more resilient market will emerge from the ashes.

Invest accordingly.

In reply to by tmosley

Laowei Gweilo tmosley Fri, 02/02/2018 - 22:45 Permalink

Yeah and he's an idiot for saying '10 years' this, or starting the bubble measurement when BTC was like <$10.

 

They keep comparing it to Tulips or Internet, but they start those indexes when they already had significant value... Most 'internet bubble measurements' look at the bubble from the late 90s, or even _anywhere_ in the 1990s.

Looking at BTC either ten years ago or even <$10 is looking measuring the internet bubble since the 80s o.0 or Tulips from the 1500s lol

 

I'm not bullish or invested on anything BTC/CC related but that part of the argument always really bugs me -_-

In reply to by tmosley

JethroBodien ThinkerNotEmoter Fri, 02/02/2018 - 19:45 Permalink

Hundreds of billions of dollars have been lost in cryptocurrencies in the last few weeks.  The question who is going to be brave enough to buy the dip.  Did we witness the high about a month ago?

People never never never never never never learn.  Don't they stop to think why clichés such as the following exist: 

- A fool and his money are soon parted

- Its different this time

- I've got a can't lose proposition for you

- People always want something for nothing

- If its too good to be true it probably is

- How I lost everything trying to catch a falling knife

- Hide your cash under your mattress

- It was a perfect storm

- Bulls make money, bears make money, pigs get slaughtered, take the money and run

- Markets can stay irrational longer than you can stay solvent

- All the weak hands are getting shaken out

- Green shoots

- The trend is your friend… until it’s not

- He who panics first panics best.

- People are getting taken to the woodshed.

 

Anyone else with some financial clichés you wish to share?

In reply to by ThinkerNotEmoter

silvermail Buckaroo Banzai Sat, 02/03/2018 - 04:51 Permalink

1. Bitcoin price goes up 10x

2. Then it goes down 70%

3. Then it goes up another 10x

4. Then it goes down 70%

5. Then it goes up another 10x

-----------------------------------

This is the typical, classic financial pyramid.
The growth in the value of an asset in which, for only one reason, is due to the influx into this scheme of Ponzi, new money from new idiots.

-----------------------------------

In reply to by Buckaroo Banzai

brexiteer silvermail Sat, 02/03/2018 - 06:10 Permalink

It is only a Ponzi if it is not the most desirable form of money ever created (which it is).  It is only a Ponzi if people do not need money (which they do).

What you are saying is something similar to "Apple is a Ponzi because people are ditching Nokia and buying Apple.  It is only due to the influx of new users into Apple that results in growth" well der! you got me there!.

In reply to by silvermail

Al Huxley eforce Fri, 02/02/2018 - 19:06 Permalink

You have to remember (as it was explained to me by a 25 year-old crytocurrency market expert - so you know he's got the experience to provide advice on this) - we can't value cryptocurrencies based on old metrics like 'price' and 'profit'.  It's a new medium that demands a new measuring stick - I think he said the important thing was to be participating, and not to sweat what you paid for your 'admission to the party'. 

 

So take heart all you latecomers who got in at 20K!  At least your participating!  Isn't it a hoot!

In reply to by eforce

tmosley Al Huxley Fri, 02/02/2018 - 19:41 Permalink

In a way its true, but it fails to take into consideration that many if not all of the coins that exist today could disappear in the current meltdown and follow-on from a Tether/Bitfinex collapse. If you are holding some of the coins that do survive, ten years from now it will indeed not matter what you paid from them. They will be money and you will spend them directly on goods and services, and you will be very, very rich.

Of course, you would be much richer and much safer if you had waited to buy until after the fraud scheme propping prices of bad coins collapsed. Much safer too, as you would have a better idea of what coins are good and what coins are bad.

In reply to by Al Huxley

Jeffersonian Liberal Gaius Frakkin'… Sat, 02/03/2018 - 09:31 Permalink

Not only is it the ultimate fiat currency, but it is nearly a caricature of currencies.

At least most other fiat currencies started off as currencies backed by something of widely accepted and stable value extrinsic to the currency itself.

Bitcoin is created completely out of thin air.

It's alarming that so many people who are otherwise proponents of sound monetary policy (born of the Austrian school of economics) are falling for this.

Bitcoiin is the central banker's ultimate fantasy: currency created out of thin air, the amount and value of which they can control with the press of a few buttons, and the use of which (spending) they can allow the government to shut down for whatever reason they so choose.

Don't bother with all the flaming and poorly thought out, "You're wrong. This is really..." bullshit. I've heard it all.

In reply to by Gaius Frakkin'…