Gold or Bitcoin? Avoid ‘malignancy’, says ‘Black Swan’ guru

Is Bitcoin or Gold a Better Investment? Billionaire crypto fanatic Mark Cuban favors Bitcoin and hits gold, and Euro Pacific Capital CEO Peter Schiff goes the other way.

Nassim Nicholas Taleb also has some ideas. Author of this week’s 2010 New York Times bestseller Black Swan– among the few who foresaw the financial crisis of 2007-2008 – took part in the debate. interview with French weekly L’Express.

It’s safe to say that Bitcoin, down more than 60% since the start of 2022, failed to impress him.

“Technology comes and goes”

One problem with Bitcoin, he said, is that “we are not sure about the interests, mentalities and preferences of future generations. Technology comes and goes, gold remains, at least physically. After a short period of indifference, Bitcoin will surely crash.”

Furthermore, he said, “An entry in a registry that requires active maintenance by interested and enthusiastic people – that’s how Bitcoin works – cannot be expected to retain its physical properties, its condition of monetary value, for any length of time. .”

Asked about the origin of the “craze for cryptocurrencies,” he pointed to the low interest rates of the past 15 years.

“Cutting interest rates creates asset bubbles without necessarily helping the economy,” he said. “Capital no longer costs anything, the risk-free returns on investment are very low, even negative, and this encourages people to speculate. We are losing our understanding of what long-term investing is. This is the end of real finance.”

One result, he claimed, was “malignant tumors like Bitcoin.”

“Everything Bubble”

Taleb is not alone in pointing to the effects of the so-called “everything bubble,” created by years of loose monetary policy by the Fed and other central banks after the Great Financial Crisis. whom Luck It was reported this week that the era of easy money was full of bulls, from crypto experts to hedge fund managers, economists and investment banks who believed the good times would never end.

Interestingly, Taleb previously supported Bitcoin. As he explained at the time L’Expresshe criticized Fed Chairman Ben Bernanke.

According to him, Bernanke did not see the structural risks of the system before the 2008 crisis and then overreacted: “Instead of fixing the debts and reducing the hidden risks, he covered them up with monetary policy that was only supposed to be temporary. I mistakenly thought that Bitcoin would be a bulwark against these monetary policy distortions.”

“Manipulators and Scammers”

Taleb also warned that “the crypto world attracts manipulators and fraudsters.”

He’s certainly not alone out there.

Coinbase CEO Brian Armstrong said at the a16z cryptocurrency founder summit in late November, “We have to agree as an industry that our industry attracts a disproportionate number of fraudsters and fraudsters. And that’s really sad. That doesn’t mean it represents the entire industry.”

(Armstrong added that he “confused” why FTX founder Sam Bankman-Fried was no longer in jail—a few weeks later.)

Demand he tweeted He has been trolled and smeared this week for his criticism of cryptocurrency, but said he has compensated for such attacks with “a lot of thank you messages for saving young people from Bitcoin.”

He shared a message in which a Twitter user said he almost bought Bitcoin, but then began to follow Taleb’s thoughts on it: “I understand why cryptocurrency is stupid in theory. Then it failed in practice. NGO saved my father’s hard-earned money.”

Meanwhile, many Bitcoin bulls remain bullish. Ark Invest CEO Kathy Wood recently reiterated her prediction that Bitcoin will reach $1 million by 2030 – just below $17,000 now. He also said that Bankman-Fried doesn’t like “transparent and decentralized” Bitcoin, because he “can’t control it” and that the FTX fiasco was caused by “transparent centralized players”.

As for Cuba, he said on Bill Maher Club casual podcast last month, “I want Bitcoin to go lower so I can buy more.”

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