July 24, 2024
Bitcoin News

Black Swan Author Says Bitcoin Resembles Ponzi Scheme

Black Swan Author Says Bitcoin Resembles Ponzi Scheme

During a CNBC’s Squawk Box interview, Nassim Taleb, “Black Swan” author, talked about his opinion on Bitcoin. He elucidated on how to hedge risk in the recent turbulent market. Taleb criticized Bitcoin, explaining it as a gimmick, too volatile to be a practical currency and not a safe hedge against inflation. He recognizes Bitcoin as having features of the Ponzi scheme. Moreover, he opined that Bitcoin is a wonderful setup of a cryptographic system that is well-made. However, there is no valid reason why one should link it to something economical. 

Nassim Taleb once supported Bitcoin. Taleb did have favorable views in the past. However, he told CNBC that he was deceived by it initially as Bitcoin can be used as a currency. But when he witnessed that the cryptocurrency price is very volatile and investors are employing the crypto as a vehicle for speculation, he started selling off his Bitcoin and commenced calling it a failed currency. Taleb encourages investors who want to hedge against inflation to purchase a piece of land and fund something in it. He opined that investors worrying about inflation would be better off purchasing property than funding Bitcoin.

Nassim Believes Bitcoin is a Failure

Nassim Taleb joins the growing list of Bitcoin critics. In February, the former risk analyst and options trader declared that he was in the process of getting rid of his Bitcoin. He views Bitcoin as a failure because he assumes that the crypto asset does not store value. He also opined that Bitcoin had failed in its supposed role as a replacement for government-backed money, principally because of its volatility. Taleb shares the same opinion with Barbara Corcoran, the Shark Tank star, who shared her opinion on crypto a few days ago. 

Corcoran contended that real estate is the most reliable way for investors to get rich, not cryptocurrency. Corcoran elucidated that she is into a tried and true method of making money and claims real estate is the best investment vehicle. While several analysts back Taleb’s theory that Bitcoin is not an inflation hedge, some believe differently. In December last year, investment bank Goldman Sachs advocated that Bitcoin is the retail inflation hedge. It further said that it could replace gold as the inflation hedge of choice. 

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