It is the time when pundits weigh in the cryptocurrency rage. Recently, the business magnate George Soros emphasized that he considers cyber money as a bubble. However, according to his words, when it bursts that will not have much effect on the financial system.
In the meantime, Richard Thaler, the economist who won the Nobel Prize in Economic Sciences last year, said that digital assets look more like a bubble. Famous for his achievements in the behavioral economics, Thaler admitted that he does not know when the bubble goes off.
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Bubble That Will Sound Like a ‘Puff’
According to Bloomberg, George Soros, who got $1 billion wagering against the British pound almost thirty years ago, said that digital money is not capable of functioning. Their main disabling factor is their unsteady nature, Soros said. Being in Davos on the World Economic Forum, the business magnate explained that crypto coins could not lead to the global crisis as it happened after previous economic bubbles burst.
“Normally when you have a parabolic curve, eventually it has a very sharp break. But in this case, as long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad,” said Soros.
Also, he added that cryptos are not likely to experience an indeed devastating crash, as they “have a rather flat top.”
On the other hand, Soros sounded quite supportive concerning the use of bitcoin’s core blockchain. He also said that his grantmaking network Open Society Foundations has been utilizing it to assist migrants in finding a connection with their relatives and guard their funds.
Bubble Or Not?
World-known economist Richard Thaler, in his turn, said that digital money preferably looks like a bubble. He made such a conclusion after paying particular attention to this phenomenon, announced he to the Portuguese media outlet ECO. Nevertheless, Thaler is not sure when exactly the crypto bubble will go off.
“There is a bubble in debt markets […] the market that to me most looks like a bubble is that of bitcoin and its sisters,” said Thaler.
Moreover, the expert stressed that the cyber money system is not functioning rationally. To prove his statement, Thaler referred to a case of Long Island Iced Tea, whose shared soared by more than 300% after the word “blockchain” was added to its name.
Interestingly, Thaler is not the only one who negatively spoke about cryptos. Among the others are Joseph Stiglitz and Robert Shiller, both Nobel Prize laureates.
