Nassim Nicholas Taleb, the renowned author of “The Black Swan,” recently tweeted a critique of Bitcoin BTC/USD, comparing it unfavorably to the mafia. He stated, “The main difference between Bitcoin and the mafia is that the mafia tended to deliver on its promise to offer protection.”
Why It Matters: Taleb’s skepticism about Bitcoin is not new. He has previously pointed out that Bitcoin’s value decreased when the US faced a funding risk and when inflation surfaced, questioning the number of believers in Bitcoin's hedging capabilities despite these instances of volatility. He emphasized the importance of future performance over past performance in finance, arguing that investors should base their decisions on today's current price, not prices from years past.
Taleb has also compared “Cryptoism” to communism, labeled Bitcoin an “open Ponzi” and a “failed currency,” and referred to it as a “magnet for idiots” and a “fool detector.” His comments reflect his belief that Bitcoin is not a reliable hedge against economic uncertainties and that its value is more affected by these events than proponents of Bitcoin as a hedge might suggest.
In a recent CNBC interview, Taleb explained why he called Bitcoin an "open Ponzi" or a "failed currency" on Twitter. He claimed that Bitcoin could go to zero even in case of a hyperinflation event because the two are not linked. He admitted that it is "a beautifully setup cryptographic system," and that it is "well made," but he reiterated, “There's absolutely no reason why it should be linked to anything in the economy."
Taleb has also criticized former Coinbase CTO Balaji Srinivasan’s Bitcoin trade, which the latter structured based on the belief that the cryptocurrency's price could surge up to $1 million in 90 days due to the rapid devaluation of the dollar. Taleb raised a question on Twitter asking how the trade could be used as an arbitrage opportunity.
These criticisms contribute to the broader debate about the role and value of cryptocurrencies in the global economy. His skepticism serves as a reminder that while cryptocurrencies offer new opportunities, they also come with risks and uncertainties. As the debate continues, investors and enthusiasts alike must weigh the potential rewards against these risks.
Articles used by the Benzinga Newsbot to generate context:
- ‘Black Swan’ Author Taleb’s Twitter Critique: Bitcoin’s Past Performance No Guarantee of Future Success
- ‘Black Swan' Author Says ‘Cryptoism' Is Like Communism
- Bitcoin Is An ‘Open Ponzi' And ‘Failed Currency,' Says Black Swan Author Nassim Taleb
- ‘The Black Swan' Author Says ‘FDIC Bailed Out Bitcoin' As Apex Crypto Reaches $24K
- Did ‘Black Swan’ Author Go Short On Bitcoin?
- Bitcoin ‘A Magnet For Idiots, A Fool Detector,' Says ‘The Black Swan' Author
- ‘Black Swan’ Author Criticizes Balaji Srinivasan’s Bitcoin Trade
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