Bitcoin is not a Hedge Against Tail Risk
— February 10, 2021
By Nouriel Roubini
Since the fundamental value of bitcoin is zero and would be negative if a proper carbon tax was applied to its massive polluting energy-hogging production, I predict that the current bubble will eventually end in another bust.
Referring to bitcoin or other crypto as “currencies” is a misnomer. They are not a unit of account: virtually nothing is priced in them. They are not a scalable means of payment: with bitcoin you can do five transactions per second while the Visa network does 24,000. Bitcoins are barely used by legitimate companies as payment for goods and services, although Tesla said it planned to start accepting them.
Read the full Financial Times article.
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.