“Dr. Doom” Suggests That 99% of Cryptocurrencies Are Worthless

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“Dr. Doom” Suggests That 99% of Cryptocurrencies Are Worthless

Nouriel Roubini, a New York-based economist and professor at NYU Stern School of Business, is known for providing views that others may not want to hear. After all, his moniker, “Dr. Doom,” didn’t happen by chance. Roubini correctly forecast the 2008 financial crisis at a time when few other economists or experts projected such a financial calamity. Roubini has lately made waves for his strong opposition to digital currencies and the blockchain business. According to CNBC, Roubini maintained his campaign on October 11, 2018, when he spoke before members of Congress, claiming that cryptocurrencies were the “mother and father of all frauds and bubbles.”

Dangers of the Bubble

Roubini said that his first fears about a cryptocurrency bubble arose late in 2017, when the price of bitcoin approached $20,000. Roubini told the U.S. Senate Committee on Banking, Housing, and Community Affairs at the time that “virtually every human person [he] encountered between Thanksgiving and Christmas of 2017” approached him for advise on whether or not to acquire digital tokens.

Roubini warned that the euphoria around cryptocurrencies might have been especially harmful since it brought in “those with zero financial knowledge,” pushing even “individuals who couldn’t understand the difference between stocks and bonds” to plunge into a “manic frenzy of bitcoin and crypto purchasing.”

The Advent of the “Crypto-Apocalypse”

Roubini chastised “scammers, swindlers,” and others in the bitcoin industry for luring unsuspecting investors with “scammy awful assets at the top, which subsequently went into a collapse and slump.” The analyst referred to the time in 2018 when bitcoin and other digital tokens fell to a fraction of their previous worth as a “crypto-apocalypse.”

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Despite his belief that the vast majority of digital currencies are “worth nothing,” Roubini said that he is “not against [the cryptocurrency sector],” and that he is “open to any form of innovation.” Nonetheless, the economist has been extremely cautious due to his perception of a large bubble.

Criticism Grows

Many other notable economists and Wall Street executives have repeated Roubini’s concerns of digital tokens, but few have been as vocal about their dissatisfaction with the business. Nonetheless, there is a sizable number of advocates of digital currencies, including those who feel that cryptocurrencies will continue to develop to address challenges that hampered the sector in its early phases.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the writer to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns bitcoin and ripple as of the day this post was published.

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