Lebanese-American financial author Nassim Nicholas Taheb stated that Bitcoins (BTC)The world’s largest cryptocurrency is a indigent hedge against a market crash. The author publicly questioned the prospects of other analysts Bitcoin as security AND storing valueemphasizing its speculative nature and price volatility.
Bitcoin’s Limitations as a Market Crash Hedge
In the warm debate On CBNC’s Squawk Box, Taleb discussed the role of Bitcoin in up-to-date finance, emphasizing that its advertised role as inflation protection or market crashes have been exaggerated. Known for his criticism of BTC and general antipathy towards the cryptocurrency industry, Taleb argues that Bitcoin is very speculative and volatile assets.
He revealed that the speculative nature of cryptocurrency undermines its the potential to become a reliable store of value in periods of economic turmoil. Taleb based his criticism on The Last Bitcoin Crashwhose price has dropped by more than 20%.
The finance writer revealed that the cryptocurrency’s massive downtrend proves “once again that it is not a hedge against asset meltdowns.” Earlier in July, the Bitcoin market was hit large-scale liquidationscaused by Mt. Gox BTC Distribution Plans and sales carried out by the German government.
Currently, the cryptocurrency is experiencing a significant drop in price following to break down Japanese stock market and adverse effects of regulatory pressures and macroeconomic factors. At the time of writing, BTC is trading at $57,333, down 13.09% over the past seven days, according to CoinMarketCap.
Speaking about the recent BTC crash, Taleb compared the pioneering cryptocurrency to gold. The financial author suggested that gold was a better store of value compared to Bitcoin. He illustrated this by noting that a piece of gold chain left on the ground for 10,000 years would still retain its intrinsic value, emphasizing the enduring value and stability of gold over time.
On the other hand, BTC as a digital currency does not have any real and relatively stable features. gold. Taleb argues that the digital resource is not a real currencyemphasizing that cryptocurrency does not have the basic attributes that make gold a reserve of value.
BTC dismissed as a ‘crazy asset’
While highlighting Bitcoin’s Limitations as a Market Crash HedgeTaleb criticized the fundamental nature of the cryptocurrency as a digital currency. The financial author described the cryptocurrency as a “crazy asset,” emphasizing that “crazy people” are driving its price up.
He also stated that BTC is similar to an exorbitant property in Manhattan that is used to attract the stock market. While he admitted that he has invested in the cryptocurrency, the financial author also stated that Bitcoin is “useless.” Taleb further explained that in an economic system, it is not useful to own an asset that increases in value from $10 to $60,000 when you are looking for price stability.
Featured image from LinkedIn, chart from Tradingview.com
