Nassim Taleb – an award-winning philosopher – has called out the cryptocurrency market again following the FTX implosion. The famous author thinks Bitcoin is a tumor and can soon present investors with an unprecedented deleveraging scenario.
Furthermore, Taleb has not shown any significant cash flow from the cryptocurrency market. Therefore, the former options trader and risk analyst thinks that the crypto market is in a liquidity crunch.
Notably, a liquidity crisis is described as a financial situation characterized by a lack of cash at hand across many financial institutions simultaneously.
Furthermore, most crypto companies – including the Binance exchange – use their native tokens to insure funds. The trend has been deemed irrational since most crypto projects either have their tokens pre-mined or control the largest hash power.
Through a series of tweets, Taleb indicated that blockchain technology has not flourished to generate significant cash flow, particularly during bear markets. Instead, Taleb thinks that the cash circulating in the cryptocurrency industry is from other crypto projects.
The decline in crypto cash flow can be mainly attributed to the FTX decline and the impending halving of DCG. Furthermore, millions of crypto traders and investors were left stranded by the collapse of FTX, which was slower to investigate than expected.
Closer Look at Crypto Market Outlook
According to the latest crypto price oracles, the total cryptocurrency market capitalization stands at around $868 billion. Additionally, the total reported crypto trading volume in the past 24 hours stands at approximately $44.7 billion. The huge difference indicates that most crypto assets are used for speculative purposes and have been stored for later use.
Thus, most of the cryptocurrency community continues to disregard Taleb’s opinion. Furthermore, speculation is part of the gray area in which the cryptocurrency market thrives.
One of Taleb’s opinion comments argues that the Bitcoin market should be compared to the Gold and oil industry that all have different intrinsic values. Moreover, the Bitcoin industry has significantly opened up locked-up economies.
According to tech billionaire Elon Musk, bitcoin will thrive for a long time, but the ongoing bear market will last for a long time. The low cash flow highlighted by Taleb is a culmination of previous major on-chain activity. Furthermore, global confidence in the cryptocurrency market has been shaken significantly.
Nonetheless, every cryptocurrency trader must conduct proper research and form personal opinions before purchasing or investing in the digital asset economy.
