‘Retail suckers’ with FOMO will end up getting run over on Bitcoin, says Roubini

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Renowned economist Nouriel Roubini says retail investors who are “afraid of missing out” are going to be crushed by investing in Bitcoin during its latest rise.

“We have, as in 2017, hundreds of thousands of retail consumers who have FOMO (fear of missing out) entering this asset class. And they’re going to buy it at maximum, as happened in December 2017, when it was $ 20,000 and dropped to $ 3,000 by the end of next year. So it’s the same phenomenon – just people move in because of FOMO, fueling the bubble, manipulation, eventually they’re going to be crushed, ”Roubini told Yahoo Finance Live on Monday.

NYU economics professor Stern argued that Bitcoin’s boom was motivated by “massive manipulation”, not a rush to hedge inflation.

“I think part of the upward movement is not driven by concerns about inflation or the downgrade of fiat currencies because gold is not going up much, TIPS (Treasury Inflation-Protected Securities) does ‘not increase much. Why would Bitcoin be a hedge against inflation and a degradation of fiat money? There has to be something else – something else is that there is massive manipulation, ”Roubini said.

Roubini, whose nickname is “Dr. Doom, ”argued that Bitcoin and other cryptocurrencies, which he dubbed“ sh-tcoins ”, have no place in the portfolio of retail or institutional investors. He pointed to “the enormous amount of volatility” as a cause for concern.

“You have to ask whether retail or institutional investors should invest in something that is so risky and something that is not a currency and is not even an asset,” Roubini added.

UNITED STATES - OCTOBER 11: Dr. Nouriel Roubini of New York University's Stern School of Business testifies at a Senate Banking Committee hearing titled

UNITED STATES – OCTOBER 11: Dr. Nouriel Roubini of the Stern School of Business at New York University, testifies at a Senate Banking Committee hearing titled “Exploring the Cryptocurrency and Crypto Ecosystem blockchain, ”at Dirksen Building on October 11, 2018. (Photo by Tom Williams / CQ Roll Call)

Bitcoin (BTC-USD) hit a weekend high of $ 58,367 per coin before dropping to $ 46,616 on Monday. The digital asset was last trading above $ 54,000 at the time of this publication, still down from recent highs.

“The reality is that no one knows what the value of this pseudo-asset is. It has no value because it has no income, has no use, has no use. It is therefore a speculative game on a self-fulfilling bubble, ”added Roubini.

Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.



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