On May 21, Nobel Prize winner in economics, Paul Krugman (Paul Krugman) tweeted a comment on Bitcoin published in the New York Times, with an accompanying text stating that “the prediction will be I received a lot of hate emails, and the “cult” cannot be laughed at.” In the New York Times review, Krugman stated that crypto assets such as Bitcoin are a Ponzi scheme.

Krugman believes that in the 12 years since its birth, cryptocurrencies have played almost no role in normal economic activities. The only time I heard that it was used as a means of payment, rather than speculative transactions, was related to illegal activities, such as money laundering or paying Bitcoin ransoms to hackers who shut it down. In his many meetings with cryptocurrency or blockchain enthusiasts, he believes that he still has not heard a clear answer as to what problems blockchain technology and cryptocurrency solve.
Why are people willing to spend a lot of money on assets that seem to be useless?
Krugman’s answer is that the prices of these assets continue to rise, so early investors make a lot of money, and their success continues to attract new investors.
Krugman believes that this is a Ponzi scheme, and a long-running Ponzi scheme requires a narrative-and narrative is where the crypto market really excels. First of all, crypto promoters are very good at technical discussions, using mysterious terms to persuade themselves and others to “provide a revolutionary new technology”, even though the blockchain is quite old in the information technology standards and has not yet been found. Any convincing use. Second, liberals will insist that fiat currencies issued by the government without any tangible support will collapse at any time.
However, Krugman believes that cryptocurrencies do not necessarily collapse soon. Because even people who are skeptical of encryption technology like him will doubt the durability of gold as a high-value asset. After all, the problems faced by gold are similar to those of Bitcoin. You may think of it as currency, but it lacks any useful currency attributes.
In recent days, the price of Bitcoin has rebounded several times after falling sharply. On May 19, the price of Bitcoin dropped to around USD 30,000, the highest drop in the day was more than 30%, and the price of Bitcoin liquidated over USD 15 billion within 24 hours. Since then, it has gradually recovered to 42,000 US dollars. On May 21, affected by the news that “the U.S. Department of the Treasury requires that cryptocurrency transfers exceeding 10,000 U.S. dollars need to be reported to the U.S. Internal Revenue Service (IRS)”, the price of Bitcoin fell again from 42,000 U.S. dollars to about 39,000 U.S. dollars, and then pulled again. Rose to 41,000 U.S. dollars.