Nassim Nicholas Taleb, the influential author of “Black Swan,” has issued a cautionary statement regarding Bitcoin’s recent decline. According to him, this cryptocurrency’s downfall indicates an imminent collapse. He views cryptocurrency as an open Ponzi scheme sustained by market manipulation.
Taleb took to Twitter to share his views on BTC performance and highlighted a significant drop of over 85% in its trading volume from its peak, indicating a loss of interest and liquidity. He warns of easier manipulations with dwindling volume, though manipulators will eventually exit.
Taleb has also accused Bitcoin supporters of exhibiting cult-like behavior and irrationality. He argues that they tend to disregard the flaws and limitations of Bitcoin, resorting instead to personal attacks when faced with criticism.
In a bold statement, Taleb remarked, “This is how Open Ponzis implode.” Notably, his observations align with recent data from Coinbase. The platform’s Q2 earnings report for 2023 revealed a drastic decrease of consumer and institutional trading volumes by 70% compared to the previous year.
The industry now faces additional challenges such as an ongoing “crypto winter” and numerous lawsuits filed by the Securities and Exchange Commission (SEC). These factors further compound the existing difficulties faced by the platform.
Bitcoin’s Price Lacks Volatility And Momentum
The apprehension toward Bitcoin grows due to its current stability, or rather the lack of volatility, in its price. A market analysis firm called Glassnode has highlighted the ongoing “extreme volatility compression” within the market, suggesting more predictable price movements and potential decline in demand and supply.
Additionally, as of August 11th, Bitcoin’s price remains below the crucial $30,000 mark—a significant support barrier in the past. A breach of this level could impose further downside pressure on Bitcoin and lead to testing new lows.
Blackfridge’s CEO, Mike Crosbie, warns that BTC precariously hovers just below this critical threshold. While there is still a possibility of an upward break at this level, each passing day diminishes that chance.
It is important to note Taleb’s skepticism towards cryptocurrencies considering his role as a longtime critic. In June, he humorously compared Bitcoin to the mafia by claiming that unlike it, which tends to deliver on its promise for protection.
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