The drama of FTX and Binance caught the attention of people outside the department as well as inside the segment. One of them is economist “Dr. Nouriel Roubini, also known as “Apocalypse (Dr. Doom)”. Here are Roubini’s comments…
Nouriel Roubini shares his intentions about Binance and FTX
Popular economist Nouriel Roubini has questioned the “recovery plans” in the cryptocurrency industry. Subsequently, he expressed his doubts about the developments regarding the FTX events. Roubini pointed out that FTX saved previously crashed platforms. Now FTX is being rescued by Binance. Therefore, Roubini asked, “Who will save Binance?” says. The economist uses the following terms:
At first, FTX saves crypto Ponzi scams that crash. Now FTX crashes and is recovered by Binance. But who will save Binance when that ‘house of cards’ collapses? Crypto is the mother of all ponzi scams! Binance is starting to bail out crypto rival FTX.
Binance signed a non-binding memorandum of understanding on Tuesday to purchase the non-US unit of FTX to overcome the liquidity crunch on the rival exchange. The overall cryptocurrency market cap fell on Tuesday after Binance announced it would sell its position in the FTX token (FTT). The price of FTT declined significantly. Bitcoin has pulled down the most affordable cryptocurrencies like ETH.
Roubini: Cryptos are not currency
Koindeks.com As we have also reported, while talking about the asset in a previous interview, Roubini actually showed his hostility to cryptocurrencies. For cryptocurrencies, he said, “by a reasonable definition, they are not currencies.” He had therefore observed that the phrase “currency” was incorrect. “When you look at the prices of these cryptocurrencies, they look like typical market bubbles,” he said. He also used the following words:
You have exponential increases at the expense of assets that are completely unrelated to the underlying base cost. Bitcoin’s own inflation in the three years before its peak was far worse than Tulipmania or the South Sea bubble or the Mississippi bubble.
Roubini cited the example of Isaac Newton, who suffered a precious loss in the stock market. “Isaac Newton lost his shirt by investing late in the South Sea Bubble – just to give an example of how even very, very smart people can get caught up in madness and into a frenzy of rising asset prices because everyone else is buying. And we’re talking about people who aren’t as knowledgeable as Newton,” he said.
Crypto’s “Lehman Brothers” moment?
Meanwhile, Circle co-founder and CEO Jeremy Allaire said that USDC, the company’s stablecoin, crypto exchange FTX has not been affected by the local token crisis. Allaire referred to the FTX bankruptcy as a “Lehman Brothers” moment for crypto. He used Twitter to share his thoughts on the Binance-FTX debacle. The Lehman collapse eventually became one of the greatest global financial disasters in 2007. It made a valuable contribution to the domino effect of multiple financial disasters. Allaire uses the following words:
Finally, having been in this division for 10 years, it’s disappointing that a technology that emerged as a reaction to times like Lehman Bros in 2008 has its own version of this collapse emerging.