'Black Swan' author Nassim Taleb says bitcoin is an open Ponzi scheme and a failed currency
- Nassim Taleb doubled down on his view that bitcoin is a Ponzi scheme and a failed currency.
- The cryptocurrency has been viewed as a potential hedge against inflation by some analysts.
- A currency not backed by a government is 'just speculation' and a 'game,' the author said.
- For more articles, go to www.BusinessInsider.co.za.
'Black Swan' author Nassim Taleb doubles down on his view that bitcoin is an open Ponzi scheme and a failed currency.
"There's no connection between inflation and bitcoin," Taleb told CNBC on Friday. "Everybody knows [bitcoin is] a Ponzi."
The cryptocurrency, often referred to as digital gold, has been viewed as a potential hedge against inflation by some analysts, highlighting its similarities with the precious metal.
"If you want to hedge against inflation, buy a piece of land," he said. "The best strategy for investors is to own things that produce yields in the future. In other words, you can fall back on real dollars coming out of the company."
He also said that bitcoin failed in its supposed role as a replacement for government-backed money, mainly due to its volatility. The author admitted that he was "fooled" into thinking it could be a viable alternative to fiat currency but later realized that a currency not backed by a government is "just speculation" and a "game".
"I was told it was going to be a currency," he said. But "you don't replace the currency with something that's so volatile that you can't really commit to a transaction in it."
Bitcoin's price has swung wildly recently. The world's largest cryptocurrency by market capitalization inched near the $65,000-level ahead of Coinbase's listing on April 14. Less than 10 days later, bitcoinslid below the critical $50,000 level, extending losses for the seventh day in a row.
The decline below $50,000 has bitcoin testing a new technical support level that could signal continued weakness, especially after 50-day moving average failed to hold as support.
The broader crypto market has come under fresh pressure after reports that US President Joe Biden is looking to double the capital gains tax rate on wealthy investors on Thursday.
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