By Hassan Mehmood (Saudi Arabia)
Noble Laureate claims that cryptocurrencies are nothing more than a bonafide and elaborate Ponzi scheme. These remarks are nothing short of dropping a destructive bomb on the crypto community. At present, the price values of the largest crypto variants have become highly volatile, giving rise to “fear” and “panic-selling.” According to experts, only experienced investors hold on to their reserves and engage in buying the dip.
Krugman became the sole recipient of the Nobel Memorial Prize for Economics in 2008 for his work on New Trade Theory and Modern Economic Geography. In his ‘expert’ opinion, digital assets are a long-term Ponzi scheme. In a recent interview with New York Times, he claimed that cryptocurrencies give people the impression of providing them with financial stability and a store of value. However, the basic structure of the DeFi system matches a lot with fraudulent business managed by notorious Bernie Madoff in the 20th century.
Many crypto proponents argue that if digital assets were a pyramid scheme, they would have died down many years ago. However, Krugman shut down such claims when he told the media that Bernie Madoff was able to run his deceitful enterprise for more than two decades, the cryptocurrencies would also run their course in the same manner.
Also read:While comparing cryptocurrencies with Gold, he remarked that many of the crypto renditions would be able to butt heads against the precious metal market. Krugman also issued another doomsday call for crypto-verse, claiming that the US government is going to intervene at one point or the other. These abrasive remarks have earned Krugman some distasteful comments from the crypto enthusiasts.
Krugman is not the only person who is worried about the mass adoption of cryptocurrencies. Another important figure, Dave Portnoy, who has a love and hate relationship with Bitcoin, shares some similar sentiments about digital assets in general. The biggest objection raised by Portnoy on Bitcoin is the absence of the real founder of blockchain technology and author of the beacon whitepaper.
In his capacity as a legacy market day trader, Portnoy reportedly invested in Bitcoin under his personal capacity. However, after suffering a loss of $25,000, Portnoy told his followers that he is out of the crypto game and branded the entire DeFi infrastructure as ‘one big Ponzi scheme’. He also added that the investors of Bitcoin should be careful because the one who is left holding out the bag, in the end, is the loser. Later on, Portnoy retracted his statements.
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