Roubini Launches Blistering Anti-Bitcoin Attack

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There were a few positive headlines for crypto yesterday. Both the Bank of New York Mellon (America’s oldest bank) and Mastercard made entrances into the cryptosphere, headlines covered more than well enough by crypto media.

Unless Apple or any other tech giant makes a break for it and puts part of its sleeping cash book into Bitcoin, just as Tesla did earlier this week, they are ripples in a sea of news.

Speaking fees

The story that did strike me was on the editorial pages of the Financial Times, written by New York University professor Nouriel Roubini and entitled Bitcoin is not a hedge against tail risk. It was an expected one, as I had forecasted when writing about EBC President Christine Lagarde earlier this week.

The powers that be are paying speaking fees to Janet Yellen at the US Treasury and it was only a matter of time before Nobel prize winning economist Paul Krugman follows in her footsteps.

Nouriel completely lost it. Watch this. #Bitcoin pic.twitter.com/mXK47sVbd9

— xCR1337 (@cryptonator1337) February 10, 2021

Roubini was easier to predict of course. The renowned economist has been a Bitcoin basher for a very long time, and is mostly highly critical of Tether, which he says is an outright fraud. He later repeated his points in video as well.

In the FT editorial, he makes the classical arguments about Bitcoin being mined by autocracies, which he states is a security nightmare. In Mr Roubini’s words

Oligopolistic miners control most bitcoin mining. Many are out of reach of western law enforcement in places such as China, Russia and Belarus, creating a national security nightmare.

By the last paragraph finally arrives at his grande finale, the defense of classic finance. According to the economics professor all his previous arguments undermine:

Claims that crypto will decentralize finance, provide banking services to the unbanked, or make the poor rich. Blockchain claims to enable cheap money transfers to refugees, but crypto is much more likely to provide cover for tax evaders, criminals, terrorists and human traffickers.

Nouriel Roubini has no intrinsic value pic.twitter.com/guPsWhCDM7

— Danny Diekroeger (@dannydiekroeger) February 11, 2021

Money linked to crime is less than 1% of the total value of crypto, as is well known. In classic finance, the number of scandals where rich people hide their accounts from the taxman (Panama, the Cayman islands) or where banks advice criminals and drug rings to invest their wealth on the other hand… are very numerous

Nouriel Roubini: bitcoin is not a hedge against tail risk https://t.co/VjEg60B7Of via @financialtimes

— Francis Fukuyama (@FukuyamaFrancis) February 10, 2021

Alhtough, Mr Roubini lays out his points in a good and readable manner, I must admit that I expected some form of originality here. The New York Times search bar does show some new articles by Mr Krugman, but he is mostly bashing Republicans for not agreeing with President Joe Biden’s stimulus plan.

Let’s see how he handles it in a few weeks, as you can be certain he will do.

Classic finance would do well to seek someone younger and more original to defend their stance against the up and coming world of crypto, because if this is the best they have, then Bitcoin has a lot more growth and adoption left.

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