After the earthquake that occurred as a result of the collapse of the UST, a ” fixed money Based on a Ponzi scheme, several economists have commented on the crash. One of them, Nobel laureate Paul Krugman in economics, does not spare his criticism of ecosystems and thinks again. this crypto has no fundamental value.
What is crypto?
Paul Krugman believes cryptocurrencies are very specific forms of digital assets. The main difference is based on: Redefining the concept of ownership. When you have 1,000 euros in a bank account, you own it, because the law says so and the bank respects this legal claim by demanding that I be the owner. Therefore, the State holding the police monopoly is the ultimate arbiter, allowing the system to work.
Conversely, ownership of a crypto asset, blockchain This is a public ledger that records all transactions within a network of users. In the context of BTC, the protocol not only removes banks from the equation, but also especially the state.
Is BTC a bad shelter against inflation?
Paul Krugman begins by comparing the evolution of the consumer price index, which measures the evolution of an average basket of goods and services in dollars and BTC. Prices in dollar terms increased on average 4% in the last six months. In Bitcoin, more 120%so represent Annualized price inflation is 380%.
The Nobel Prize therefore confirms that: BTC is not (yet?) a good asset to hedge against inflation. At least in the West, it is hardly possible to reject his conclusion.
Crypto, specifically marketing?
Initially, BTC attracted a clique of libertarians who were fascinated with the protocol technology, then gradually bull markets attracted new investors motivated by quick profits. Celebrities and influencers have actively contributed to this entry of new entrants: Elon MuskMatt DamonMike Tyson or Kim Kardashian.
political figures such as New York City Mayor Eric Adams Where Republican Senate candidate Josh Mandel all praised BTC. The latter even plans to turn Ohio into a state ” Pro-God, Pro-Family, pro bitcoin Krugman finds it unfortunate that the poorest are also most likely to be influenced by these celebrities. And therefore you lose money.
Paul Krugman, crypto investors very different from stock market investorss. These would mostly be white and would have followed a college course. Conversely, citing a NORC study, 44% of crypto investors would not be white and 55% would not have a college degree.
No core values?
The Nobel laureate sees no fundamental difference between cryptocurrencies and payment systems like Venmo or PayPal. Yet he knows benefit on the black market through more or less anonymous crypto. Therefore cryptos do not play no role in economic transactions and prices currently only based on speculation and FOMO (fear of missing out).
According to Paul Krugman, Bitcoin will not need additional time to develop. thinks about it this is already old technology, as old as iPad and who didn’t know how to convert the test. The inability to easily pay for groceries in BTC will prove this unsuccessful. Entry to El Salvador is also a fault sinking Due to low usage.
Crypto crash, new bottom premiums?
Paul Krugman draws a parallel between the subprime crisis and the crypto market. The risks associated with cryptos are disproportionately misinformed people However crypto unlikely to escalate into economic crisis in general, due to the small size of the ecosystem relative to the financial industry.
He compares the influence of celebrities like Musk to that of promoters. primary mortgage. At the time, it was about democratizing working class access from property owner to minority groups.
Nobel laureate Paul Krugman isn’t his first critique of crypto and bitcoin (BTC). The UST collapse only reinforces his vision: crypto has no core value, is bad for the environment, and the poor will be the first victims. It is worth remembering that this economist said in 1998 that the internet would have no more impact on the world than fax…
Source one : New York Times ; New York Times
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Bitcoin changes everything! Having a financial background, I am passionate about everything related to this technology. Every day I try to enrich my knowledge of this revolution that will allow humanity to advance in the conquest of freedom.