Nassim Nicholas Taleb — former options trader, risk analyst, and author of the bestseller about high-impact unpredictable events “The Black Swan” — explained why he is not a fan of Bitcoin (CRYPTO: BTC).
What happened: During a recent CNBC interview, Taleb explained why he called Bitcoin an “open Ponzi” or a “failed currency” on Twitter.
“It has the characteristics of an open Ponzi, and everyone knows that it’s a Ponzi. Basically, there’s no connection between inflation and Bitcoin. None.”
To further cement his idea, Taleb claimed that Bitcoin could go to zero even in case of a hyperinflation event because the two are not linked.
He admitted that it is “a beautifully setup cryptographic system,” and that it is “well made,” but he reiterated, “There’s absolutely no reason why it should be linked to anything in the economy.”
To those who want to hedge against inflation, Taleb recommended looking into buying land and growing olives on it, instead of using Bitcoin that he believes has no connection to inflation whatsoever.
He said that the best strategy for any investor is to “own things that produce yields,” like a land that produces olive oil.
Taleb explained that initially, he expected Bitcoin to become a medium of exchange, but then it proved to be too volatile and became a speculative asset.
He said that it coould not be a currency.
“It’s incompatible with the original aim to replace the dollar, you don’t replace a currency with something that is so volatile that you can’t really commit to a transaction in it. […] It’s like tulips.”
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