Global economist Nouriel Roubini, one of the few who predicted the 2008 financial crisis, is making sure U.S. senators don’t miss his warning on cryptocurrency.
Within minutes of testifying at a congressional hearing on Capitol Hill on Thursday, Roubini sounded alarms on multiple aspects of the new digital asset class.
“Crypto is the mother or father of all scams and bubbles,” Roubini, also a professor at New York University, told the U.S. Senate Committee on Banking, Housing and Community Affairs at a hearing.
The self-described expert on international financial markets, asset and credit bubbles and their bust, said the first warning sign came after late last year as bitcoin neared a high of almost $20,000. Roubini told senators that “literally every human being I met between Thanksgiving and Christmas of 2017” asked him if they should buy cryptocurrency,
“Especially folks with zero financial literacy – individuals who could not tell the difference between stocks and bonds – went into a literal manic frenzy of Bitcoin and Crypto buying,” Roubini said in prepared testimony.
In a prepared testimony, Roubini called out “scammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders)” who he said tapped into “clueless retail investors’ FOMO (‘fear of missing out’),” then took them for a ride with pump-and-dump schemes for “scammy crappy assets at the peak that then went into a bust and crash — in a matter of months — like you have not seen in any history of financial bubbles.”
Since the height of the frenzy, bitcoin has fallen more than 65 percent, in what Roubini calls “crypto-apocalypse.” The total market capitalization for cryptocurrencies is down by more than 60 percent, according to data from CoinMarketCap.com. Bitcoin dropped 6 percent to a low of $6,125.75 Thursday as the rest of the global markets saw their biggest drop since February this week.
Other economists and Wall Street leaders have agreed with Roubini’s assessment on bitcoin. But few have as aggressively spoken out about its underlying technology, blockchain. Roubini sees almost no reason for its widespread adoption.