The cryptocurrency world is a “stinking cesspool” and is fundamentally worth nothing, according to Nouriel Roubini, the economist famed for predicting the 2008 financial crisis.
In a series of tweets, Roubini said late Thursday that a recent sharp downturn in the prices of cryptocurrencies — which came amid an intense period of selling for global stock markets — showed that the nascent digital assets have poor fundamentals.
“The bloodbath is worsening,” he said in a response to one Twitter user, pointing out that digital currencies had fallen much more steeply than equities during Wednesday and Thursday’s sell-offs. “So tell me: which better fundamentals? Can’t convert s—coins into productive manure.”
Roubini, who has often been referred to as “Dr. Doom” due to his bearish market outlook, is known to be highly skeptical of cryptocurrencies. On Thursday, he said in testimony to U.S. senators that crypto is “the mother or father of all scams and bubbles.” Virtual currencies like bitcoin are known to be highly volatile, sometimes adding or shedding hundreds of dollars in value within hours.
He continued in a separate post: “It is indeed laughable to think that useless crypto-currencies or s—coins have any fundamentals of value. Their fundamental value is ZERO or actually negative … if you price correctly their negative externality of hogging energy and destroying the environment.”
Cryptocurrencies received much attention from major central bankers, financial executives and economists late last year when the world’s largest by market value, bitcoin, surged to a record high close to $20,000.
Some, including J.P. Morgan CEO Jamie Dimon, had called the phenomenon “tulip mania” — in reference to the bubble in tulip prices in the 17th century — while others have said they favor the underlying blockchain technology associated with cryptocurrencies.
Bitcoin, ether and XRP — collectively the three largest digital assets by market capitalization — have plummeted from their record highs however. Bitcoin has fallen almost 70 percent since its all-time high; ether, the digital token of the Ethereum blockchain, has plunged more than 85 percent; and XRP, a cryptocurrency promoted by blockchain firm Ripple, has slipped nearly 90 percent.
Prices were seen to stabilize somewhat Friday morning however, with bitcoin barely moving, ether down by 1.9 percent and XRP up 2.2 percent on the day, according to CoinMarkCap data.