Nobel Prize-winning economist Paul Krugman is confident bitcoin and Ethereum, the world’s two biggest digital currencies by market cap, aren’t going to last much longer and are headed for points of no return.
Paul Krugman Thinks BTC Is Done
A lot has happened in the crypto arena in just the last few months. For one thing, the fall of crypto exchange FTX has sent ripples throughout the space that have seemingly caused a lot of other exchanges and blockchain-based companies to feel the heat. Aside from this, the prices of many digital currencies are struggling to maintain their present levels, with assets like BTC now falling into the low $16K range at the time of writing.
This is the lowest the asset has been in over two years, and many analysts think the currency could fall to 2019 levels. Paul Krugman is going a step further and claiming that bitcoin and many of its altcoin cousins are “headed for oblivion.”
In a recent interview, Krugman stated:
It’s hard to see what advantage these firms would have over ordinary banks. Even if the value of bitcoin doesn’t go to zero (which it still might), there’s a strong case that the crypto industry, which loomed so large just a few months ago, is headed for oblivion.
The FTX disaster is likely going to go down as one of the biggest digital currency embarrassments in history. The enterprise, first beginning in the year 2019, was long considered one of the big golden players in the industry, having accumulated billions of dollars in user funds over the course of three years and eventually rising to the top of the exchange ladder.
It’s founder and head executive, Sam Bankman-Fried, was considered a genius by many, and prior to the company’s fall, his net worth was estimated to be above $16 billion, though that’s all changed now that the company has had to file bankruptcy and Bankman-Fried has resigned from his post.
For a while, it looked like larger competitor Binance was going to buy the smaller firm out, but this wasn’t meant to be. Now, regulators everywhere are renewing calls for high-end regulation to ensure that what happened with FTX never happens again.
Regulation Needs to Come in
Anna Becker – chief executive of crypto trading firm Endo Tech – said:
If crypto is to survive, we will need to see an agreed form of regulation that comes from within the industry and is overseen by regulatory bodies such as the U.S. Securities and Exchange Commission (SEC) and Federal Deposit Insurance Corporation (FDIC) to ensure proposed standards are maintained. Heightened regulation is a matter of urgency and needs to be established immediately. For retail investors who aren’t as well versed in risk as professional investment firms, they deserve trustworthy oversight, guidance, and risk disclosure.
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