TL;DR Breakdown
- Krugman says crypto is a ponzi scheme
- Dave Portnoy also believes crypto is a ponzi after losing BTC investment
Paul Krugman, an American economics professor and a Nobel laureate winner has described cryptocurrencies as a long-running Ponzi scheme.
Although the American Professor is a known crypto critic, he made this comment against the backdrop of the falling price of cryptocurrencies.
Krugman described crypto investment as investing in digital assets very similar to the infamous form of fraud from the last century that created the illusion of a sustainable business but, in the end, turned out to be a pyramid scheme during an interview with New York Times.
He, however, said the crypto hoax would not disappear anytime soon, similar to Bernie Madoff’s notorious investment scam. Krugman believes the crypto Ponzi could last for a decade.
”But could a Ponzi scheme really go on for this long? Actually, yes: Bernie Madoff ran his scam for almost two decades and might have gone even longer if the financial crisis hadn’t intervened.”
Additionally, Krugman related cryptocurrencies to gold. He opined that some cryptocurrencies would be able to compete with the endurance of the precious metal.
He largely predicted that soon enough, the American government would have to crack down on crypto like they did to gold in the 1930s.
Portnoy in Krugman’s shoes on cryptocurrencies
Similar to the Nobel Laureate winner’s opinion on crypto, Legacy market day trader Dave Portnoy, for example, shared the same opinion about Bitcoin last year. To him, the digital asset lacks accountability due to its anonymous founder.
Despite his sentiment, he invested in Bitcoin, and after a loss, he opted out for good. Then he said he was coming for BTC, invested some amount, claimed a loss of $25,000, and declared that he is out.
Portnoy explained the decision saying that Bitcoin is ”one big Ponzi scheme.” He further argued that ”you get in, and you just have to not be the one left holding the bag.”
He later admitted he was wrong about it.
