An economist who predicted the 2008 financial crisis has said that bitcoin was ‘the mother of all bubbles’ after dropping 12 percent in value on Friday.
Nouriel Roubini, known as ‘Dr Doom,’ and professor of economics at New York University, argued that it was a favourite among ‘charlatans and swindlers,’ reports The Guardian, as its price fell below $8,000, to $7,796 during trading Friday afternoon, according to CoinMarketCap.
Since peaking to within touching distance of $20,000 at the end of December, bitcoin has seen its value plummet amid regulatory uncertainty and government crack downs. It has recovered slightly and is currently trading at $8,745.
Roubini is of the opinion, though, that this is the beginning of a crash, which would ultimately see its value fall ‘all the way down to zero.’
Policymakers and regulators are getting worried. Pretty much every G20 policymaker is talking about a crackdown. We can’t allow it to become the next Swiss bank account for use by criminals and people evading tax.
Various critics have come out against bitcoin. Last month, Nobel-prize winning economist Robert Shiller, stated that while the number one digital currency was an ‘interesting experiment,’ it would not be a ‘permanent feature’ in our lives. Stephen Poloz, the governor of the Bank of Canada, said at the World Economic Forum that trading in the cryptocurrency was similar to ‘gambling.’ Whereas, Cecilia Skingsley, deputy governor at the Swedish Central Bank, claims that bitcoin isn’t even a currency.
India’s finance minister Arun Jaitley has become the latest to speak out, claiming during his budget speech that the government didn’t recognise bitcoin as legal tender, vowing to ‘eliminate‘ its use in ‘financing illegitimate activities or as part of the payment system.’
It’s thought that the latest price drop in bitcoin’s value is due in part to the news from India’s finance minister. It remains to be seen whether the currency can regain back previous highs and if it will experience a turnaround in price.
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