Author of the fundamental work on risk analysis “Black Swan,” Nassim Nicholas Taleb, has issued a warning about the coming collapse of Bitcoin, the most popular cryptocurrency.
Those who had been the most fervent advocates of a craze, like Bitcoin, sometimes assert that its demise was foreseen when the trend’s popularity began to wane. On X, Taleb wrote.
Bitcoin’s trade activity on all exchanges fell in late August, according to statistics from CryptoQuant, showing a startling 94% drop from March.
Taleb has also lately utilised social media to suggest that “inexorable decay” rather than a market catastrophe will ultimately lead to Bitcoin’s demise. He declared, “Fads are more threatened by indifference than by disgust.”
The professor’s remarks come at an odd moment for Bitcoin because it is now up more than 6% as a result of Grayscale’s triumph over the U.S. Securities and Exchange Commission.
Long-term investors seem to be largely unconcerned despite the recent one-day sell-off on August 17, which was the largest since the FTX meltdown in November.
However, Taleb argues that when trade volume declines, the possibility of market manipulation increases, which he compares to how “Open Ponzis implode.” He had previously emphasised the fact that since its peak, Bitcoin trading volume has decreased by almost 85%.
Though Taleb’s predictions indicate that Bitcoin may be approaching an ice age, experts like Julio Moreno, head of research at CryptoQuant, contend that low trade volumes are characteristic of bear markets and are expected to increase in a bull market.
Some experts even assert that the market may not be inherently negative and that the absence of significant triggers may be to blame for the lacklustre price movement. A spot Bitcoin ETF’s probable approval may alter that.
