While Jim Chanos and Paul Krugman have pounced on the cryptocurrency meltdown as proof that the sector is based on hype and speculation and is best viewed as a hive of fraud, corruption, and predatory conduct, Michael Burry has highlighted bitcoin's volatility. The market collapse, in contrast, will help clean up the crypto ecosystem and distinguish the truly valuable businesses and tokens from the rest, according to Mark Cuban and Mike Novogratz.
Michael Burry, Paul Krugman, and Jim Chanos Remain Pessimistic About Bitcoin's Prospects
In a recent tweet, Michael Burry targeted bitcoin, remarking that the most expensive cryptocurrency has recently moved practically in lockstep with the biggest US IT stocks. The investor popularized by the "The Big Short" fame noted in a tweet his question if we are sure that Bitcoin is not just another risk asset in the Nasdaq 100. The price of bitcoin, according to him, has fallen from over $60,000 in November to roughly $21,000 these past few days, making it fall in line with the stock market index.
In the past, Burry has also categorized bitcoin as a "speculative bubble" and has always issued a stern warning that central banks may view it as a threat to their currencies, which would hinder its growth. Additionally, he has linked the cryptocurrency boom to the dot-com and housing bubbles and warned that ordinary investors in meme stocks and cryptocurrencies are heading for the "mother of all disasters."
He compared the difficulty in accepting the possibility that cryptocurrency enthusiasts' coins may be worthless to most Americans' inability to accept that housing prices may be greatly exaggerated and that trillions of dollars of real estate riches may be destroyed. The Big Short appears to have given way to the Big Scam, according to Krugman.
On a recent episode of Bloomberg's "Odd Lots" podcast, Jim Chanos criticized the cryptocurrency sector. He claimed tokens haven't replaced dollars and haven't succeeded in serving as portfolio hedges, saying, "A lot of the concepts underpinning crypto's early popularity have basically proven to be not there or wanting." The head of Kynikos Associates and seasoned short seller also accused some cryptocurrency companies of defrauding their clients and compared them to Ponzi schemes.
Regarding the larger crypto market, he stated, it remains a predatory junkyard. The enormous ecology built around it, which also arose overnight, only stole fees from unwary investors who mostly came from retail traders.
Mark Cuban, Mike Novogratz Stress Optimist Outlook About The Crypto Market
However, Mark Cuban continued to maintain his prediction that any crypto firms offering game-changing applications and innovations would succeed in attracting customers. He also brushed off the negative impact that any expected flurry of interest-rate hikes this year might create. Cuban has previously declared that only a handful of crypto tokens will become world-beaters, while others won't survive.
Cuban says that bitcoin, Ethereum, and a few others will be closely similar to those that were built during the dot-com bubble, which survived bursting and thrived, like Amazon, eBay, and Priceline.
Mik Novogratz says that the crash in token prices will only benefit the industry in the long run by eliminating excessive leverage that also endangers the crypto ecosystem. While he believes it might take a while for the market to recover, it will soon explode upwards as soon as the Feds halt interest rate hikes.
