Famous Black Swan author Nassim Nicholas Taleb recently spoke with L'Express about his thoughts on Bitcoin and dubbed it the imbecile detector.
Taleb contends that Bitcoin's goal of serving as both a decentralized currency and a store of value has not been accomplished. He also asserts that it is prone to inflation and helpless against unanticipated events.
The buzz surrounding cryptocurrencies can be attributed to the almost nonexistent interest rates that are reducing the options accessible to investors looking for safe investment opportunities. As a result, this promoted speculation as opposed to actual financing.
Without necessarily boosting the economy, lowering rates causes asset bubbles. Since capital is now free, risk-free returns on investment are too low or even negative, which encourages speculation. We no longer understand the meaning of a long-term investment. The end of real finance has here.
He also alluded to enterprises with little cash flow and no underlying financial soundness, describing it as a prevalent Ponzi-like attitude that was gaining ground in the computing industry.
Since he opposed the monetary actions done by former Federal Reserve Chair Ben Bernanke in the wake of the 2008 financial crisis, Taleb initially held a favorable stance toward cryptocurrencies. He now believes that manipulators and scammers are drawn to digital currencies, where they can prey on naive investors who have been fooled by promises of quick and extravagant gains.
However, if the system ever manages to become regulated, serious, and honest, it is possible that digital money may displace conventional finance.