Nouriel Roubini Says ‘Literally 99% of Crypto is a Scam’
Nouriel Roubini, also known as “Dr Doom,” has commented yet again on his low opinion of cryptocurrencies. According to the NYU professor, “literally 99% of crypto is a scam.”
The ‘Dr Doom’ Stance on Crypto
As an economist and one of the biggest criticizing voices of crypto, Roubini has made several statements on why he believes this new asset class is nothing of value. In the latest episode of his podcast, The Walkthrough with Nouriel Roubini, he emphasized this opinion again, calling cryptocurrency a scam and attacking its “pigovian” monetary policy:
“The notion that cryptocurrencies have become a mainstream form of payment? A joke. It’s a scam. The entire crypto universe is a giant speculative bubble now and most of it is driven by manipulation, fraud and illegal activities like money laundering.”
Roubini goes on to explain that certain financial institutions such as the Federal Reserve and European Central Bank (ECB) use monetary policies rooted in evidence-based economics, designed to encourage economic growth without simply printing money and fostering inflation. He sees this as being in stark contrast to the “pigovian” monetary policy of cryptocurrency, which he says “…basically relies on printing an infinite amount of currency and diluting it.”
Crypto Haters Unite
Roubini isn’t alone in his opinion. Other famous figures such as Warren Buffett and Bill Gates have expressed similar sentiments. Buffett has stated that while blockchain technology has some real potential, he believes cryptocurrencies are nothing more than “rat poison squared” and that he will never own one. Gates has said, “Cryptocurrency is definitely a bubble that can live in parallel with a few real world uses, but the majority of it is just pure speculation and the potential for scams.”
Evidence of Cryptocurrency Scams
It’s not just speculation that has raised eyebrows. A recent report from the Blockchain Transparency Institute (BTI) found that there are 1690 crypto projects with suspected artificial exchange volume. These “ghosts” use fake accounts to purchase and sell their own tokens and manipulate their market capitalization.
Some of the biggest crypto scams of recent years have included:
- Bitconnect, a scam to promise extremely high returns to investors over a short period of time
- OneCoin, which duped thousands of investors out of their money
- Plexcoin, a Ponzi scheme which the SEC stopped in 2017
These are only a few examples of the many cryptocurrency scams out there, which have undoubtedly not only shaken public trust in cryptocurrencies, but given legitimate flaws to those critical of the asset class.
The Bottom Line
Regardless of whether Nouriel Roubini’s assertion of “literally 99% of crypto is a scam” is accurate, it’s clear that the asset class has faced a number of fraudulent and inappropriate activities, which have had a serious effect on the public’s image of it. It is up to the industry’s stakeholders to take action to protect consumers, safeguard their investments, and put investor confidence in cryptocurrencies back on the right path.