Bitcoin is a Tumor Created by Easy Money Says Nasim Taleb - is He Right?
Risk management guru and author of "The Black Swan," Nasim Taleb, has taken a jab at Bitcoin, calling it a tumor created by easy money.
In an interview with CNBC, the New York Times best-selling author called Bitcoin, as well as the real estate market, a "tumor" that has been brought on by incompetent monetary policy. He opined that years of zero percent interest rates maintained by the U.S. Federal Reserve Bank damaged the economy and created bubbles like Bitcoin.
"At zero interest rates… for long periods of time, you are hurting the economy. You're creating bubbles, creating tumors like bitcoin, creating hedge funds that should not exist but have existed for 15 years," Taleb said.
His statement is in reference to the Fed holding funds target rate at a range of 0% to 0.25% between 2008 and 2015 to tackle the 2008 global financial crisis. The Fed also cut rates to near zero again in 2020 in response to the COVID-19 pandemic.
Taleb maintained that this easy-money monetary policy has left an entire generation of investors oblivious of the effects of a recession - a phenomenon that last occurred in the 1980s. However, they are in for a rude awakening as the Fed is now determined to slow down inflation by implementing interest rate hikes to bring markets "back to normal economic life."
When asked what he would consider normal, he said he expects the interest rate to rise to around three to four percent.
This is not the first time the former options trader has criticized Bitcoin. Last year, he called the pioneer digital currency a "contagious disease" and an "obsolete product of low-interest rates" that has "zero value" in an interview with CNBC.
Meanwhile, the Fed's drive to rein in inflation has been having a marked effect
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