It was the year 2008 when Satoshi Nakamoto invented Bitcoin, the first-ever digital currency in the world using the underlying technology of blockchain. He created the cryptocurrency to provide a solution for double-spending without the need for intermediaries. From a single cryptocurrency, the number has rapidly grown to 4,000 in just 13 years.
The massive adoption by institutional investors has helped major cryptocurrencies to enter the mainstream. The crypto industry is now one of the fastest-growing industries worldwide with a total market cap of 1.38T with BTC (bitcoin) being the most dominant amongst all cryptocurrencies.
Even retail investors have joined the throng despite the investment risk that involves digital assets primarily due to their volatility. Rich and powerful personalities have their own crypto favorites. Tesla founder and CEO Elon Musk dubbed as “Dogefather” is one of Dogecoin’s top supporters along with Dallas Mavericks owner Mark Cuban. Jack Dorsey, founder, and CEO of Twitter is a BTC (bitcoin) maximalist. Big names like Michael Novogratz and Michael Saylor are known as BTC (bitcoin) proponents but they also explore the potentials of other cryptocurrencies in the market. And the list goes on for these crypto supporters, fans, and believers. But cryptos have not only gained loyal followers and critics on the other side. Who are these and why are they hostile to digital assets like BTC (bitcoin)? Let’s get to know the cryptos biggest critics and reveal the reasons behind it.
Top Crypto Critics: Reason Revealed
Crypto critics are not critics for no reason. With most of them coming from respected backgrounds, there are compelling reasons why remain hostile with virtual assets despite their adoption particularly of BTC (bitcoin) as payment on a national level with El Salvador adopting it as legal tender. Let’s get to know them one by one by getting a peek at their backgrounds.
A Professor of Economics and International Business at New York University Stern School of Business. He is also the co-founder and chairman of Roubini Global Economics, an independent, global macroeconomic and market strategy research firm. He received his BA in political economics at Bocconi University, Milan, and a doctorate in international economics at Harvard University. He became an academic at Yale and a visiting researcher/advisor at the International Monetary Fund (IMF), the Federal Reserve, World Bank, and Bank of Israel. He was a senior economist for the Council of Economic Advisers under Bill Clinton’s administration. He has also worked under the Obama administration as a senior adviser to Timothy Geithner, who was Treasury Secretary at that time. He admires Jeffrey Sachs, an American economist whom he described as “someone with a great mind”. Roubini is also a member of the Berggruen Institute’s 21st Century Council. What are his contributions and accomplishments? He is one of few economists who predicted the housing bubble crash of 2007–2008 which was written on his IMF position paper in 2006. That later earned him the title of “Dr. Doom” and “permabear” in the media. His accurate predictions have made him famous and a major figure in the U.S. and international debate about the economy. He was ranked as was #4 on Foreign Policy magazine’s list of the “top 100 global thinkers. In 2013, he received an award the honorary GTF 2013 Award for Excellence in Global Thinking from the Global Thinkers Forum. You will definitely agree that this is a fully loaded portfolio.
In 2014, Roubini launched his first attack on BTC (bitcoin) declaring it a “Ponzi scheme” and a “lousy” store of value. He has remained pessimistic about crypto which earned him the title “Crypto’s Fiercest Critic”. In a tweet he made, he stressed out that digital assets can be used to facilitate criminals and their vulnerability to hacking.
So Bitcoin isn't a currency. It is btw a Ponzi game and a conduit for criminal/illegal activities. And it isn't safe given hacking of it.
— Nouriel Roubini (@Nouriel) March 9, 2014
He also stated that no goods and services were being priced in the cryptocurrency and “there never would be”. He further added:
“Bitcoin price volatility implies huge market risk”
In November 2020, he made a surprising remark on BTC (bitcoin) after the cryptocurrency price climbed to $16,000 recording a 40% increase. In an interview with Yahoo Finance, he admitted that bitcoin is “maybe a partial store of value”.
“[Bitcoin is] maybe a partial store of value, because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time, because for most of those other ones, literally, is done ad hoc, and they’re being debased faster than what the [U.S. Federal Reserve] is doing.”
Fast forward to the year 2021. On April 14, BTC (bitcoin) recorded its newest all-time-high after almost breaching the $65K mark. The cryptocurrency continued on its bullish trend bringing the crypto market cap to almost $3 trillion. Days after, its price started to drop. Although most companies like Microstrategy view BTC (bitcoin) as a hedge against inflation, Roubini says otherwise. In an interview with the Insider, he stated that the digital asset is not a store of value because of its correlation with stocks. In his interview with MarketWatch, he stressed that BTC (bitcoin) and other cryptocurrencies are like “bubbles”.
“A bubble occurs when the price of something is way above its fundamental value. But we can’t even determine the fundamental value of these cryptocurrencies, and yet their prices have run up dramatically. In that sense, this looks like a bubble to me.”
In May, BTC (bitcoin) price slumped to $30K losing almost 50% of its value and resulted in a market crash. Is Roubini’s prediction on Bitcoin and cryptos true after all?
An American business magnate, investor, and philanthropist, and the chairman and CEO of Berkshire Hathaway. He is ranked as the ninth richest man by Forbes with a net worth of $101.8 billion. He entered Wharton School of the University of Pennsylvania in 1947 and later transferred to the University of Nebraska where he graduated at the age of 19. He also graduated from Columbia Business School and attended the New York Institute of Finance. In 1956, he founded Buffett Partnership, Ltd which later acquired textile manufacturing firm, Berkshire Hathaway. He was dubbed as the “Oracle” or “Sage” of Omaha by global media. He is known for his adherence to value investing, and his personal frugality despite his massive wealth. His works as a philanthropist were also remarkable. He pledged to give away 99 percent of his wealth primarily via the Bill & Melinda Gates Foundation. In 2009, he founded The Giving Pledge with Bill Gates where the duo pledged to give away fifty percent of their wealth. In the same year, Buffet was elected to the American Philosophical Society.
In 2019, in an interview with CNBC, Buffet has stated that cryptocurrencies are zero in value and he will never own one.
“Cryptocurrencies basically have no value and they don’t produce anything…In terms of value: zero. I don’t have any cryptocurrency and I never will.”
He also stressed the cryptocurrencies association with fraud.
“There’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.”
On one occasion, he even said that BTC (bitcoin) is “probably rat poison squared.” But why does Buffet dislike cryptocurrency that much? First, crypto particularly BTC (bitcoin) has “no unique value at all”. During his 2020 interview with CNBC, he stated:
“They don’t reproduce, they can’t mail you a check, they can’t do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person’s got the problem.”
The second reason was he doesn’t think crypto counts as money and referred to it as a “mirage”. In his 2014 interview with CNBC, the billionaire philanthropist said:
“It does not meet the test of a currency. It is not a durable means of exchange, it’s not a store of value.”
And last but not the least, he doesn’t understand it.
“I get in enough trouble with things I think I know something about. Why in the world should I take a long or short position in something I don’t know anything about?”
On May 1, during the annual meeting of Berkshire Hathaway Inc. again Buffet slammed cryptocurrencies branding them as “disgusting”.
“I think the whole damn development is disgusting and contrary to the interests of civilization. Of course, I hate the bitcoin success… I don’t welcome a currency that is so useful to kidnappers and extortionists”.
Gold bug Peter Schiff has been actively slamming BTC (bitcoin) in his tweets. He has been on the headlines due to his extreme hostility towards cryptocurrencies primarily BTC (bitcoin). But what do we know about Schiff aside from being a “gold bug”? Let’s get to know him better by checking on his portfolio. Peter Schiff is an American stockbroker, financial commentator, and radio personality. He went to do his Bachelor of Science degree with a double major in Finance and Accounting from the University of California, Berkeley in 1987. He is very well known and respected in the investment world leads. He hosts his own podcast titled The Peter Schiff Show. He is also a frequent guest as a financial commentator on networks such CNBC, FOX News, and Bloomberg TV. He is the CEO and chief global strategist of Euro Pacific Capital Inc. In the early 1990s, he started his career with a brokerage company Shearson Lehman Brothers as a stockbroker. In 1996, he and his partner acquired an inactive brokerage firm and renamed it Euro Pacific Capital. They started their operation in a small office in Los Angeles. The office is now headquartered in Westport, Connecticut with six other branch offices across the US.
In 2011, he founded Euro Pacific and promoted it as an alternative to the established banking system. Schiff bears a moniker as “Dr. Doom”. During his interview in 2006, he likened the United States to “Titanic”.
“The United States is like the Titanic, and I am here with the lifeboat trying to get people to leave the ship…I see a real financial crisis coming for the United States.”
He released the book “Crash Proof: How to Profit From the Coming Economic Collapse” in 2007 before the economic crash. And it turned out that his prediction on the upcoming economic collapse and the decline of the American dollar was accurate and turned him into a star. He now has a net worth of $80 million. The crypto community and Schiff harbored a hate-hate relationship due to the latter’s constant bashing particularly with BTC (bitcoin). Why does he hate BTC (bitcoin)?
In a previous interview, he stated that bitcoin and other cryptocurrencies are just representations of digital fiat.
“Our monetary system is based on faith because there’s nothing real behind dollars or euros, and it’s just based on the fact that you believe people are going to want it. Other than that, the other thing currencies have is that governments accept it or require it for payment of taxes. So if you live in America, the IRS wants your taxes, and you better send them dollars. That’s what they accept there, and there is a natural demand for dollars to stay out of jail.”
He also added that people hold BTC (bitcoin) as a speculative asset.
“The people that are using it [Bitcoin] are using it as a speculative asset. I talked to a guy today who showed me his cryptocurrency portfolio, and he had like $50,000 — I asked him have you ever spent any? He said “no,” and he’s never used it in commerce — He’s speculating on it, and he owns it as an ‘asset.’”
And lastly, he pointed at that cryptocurrency market signals are “wrong”.
“So how do you know? What if somebody comes up with a digital currency a year or two from now that is so much better than bitcoin? It’s everything bitcoin does, better, faster, and cheaper. Everyone then wants that new one, and nobody wants bitcoin. It’s worthless.”
In September 2020, he traded words on Twitter with Tyler Winklevoss after he predicted the price of BTC (bitcoin) to be more bearish.
“The more the 10K support level is tested, the weaker it gets. Markets rarely give investors that many chances to buy the bottom.”
But on his July prediction, the gold bug stated that that the price of Bitcoin would drop as gold surged which apparently did not happen and he admitted he was “wrong”.
“I was right on gold, but wrong on Bitcoin. The latter did manage to get through resistance and rally up to $12K, thanks in large part to a ride on gold’s coattails and a massive TV advertising buy by Grayscale.”
But even the Schiff family is now torn between BTC (bitcoin) and gold when his son Spencer Schiff sold all his metal holdings and became a 100% BTC hodler. His son received whipping so to speak when he was lambasted by his father when he first purchased BTC (bitcoin) in September 2020.
He is a successful American business magnate, software developer, investor, author, and philanthropist. He founded the Microsoft Corporation with his childhood friend Paul Allen in April 1975. He held the positions of chairman, chief executive officer (CEO), president, and chief software architect during his stint in the company until May 2014. He brought the microcomputer revolution between the 1970s to 1980s. Currently, he is now working full time at the Bill & Melinda Gates Foundation with his wife Melinda Gates. The charitable institution was established in 2000. In 2020, he left his board positions at Microsoft and Berkshire Hathaway to focus on his charity works. He was ranked as the fourth richest man in the world next to Elon Musk in a list by Forbes with a net worth of $129.2 billion.
He also founded other companiesBEN, Cascade Investment, bgC3, and TerraPower. He and Warren Buffett founded The Giving Pledge in 2010 where they along with other billionaires pledge to give at least half of their fortune to philanthropy. He donated huge amounts to a number of charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation. He spearheaded an early 21st-century vaccination campaign that significantly contributed to the eradication of the wild poliovirus in Africa. Though he was much behind the international response to the COVID-19 pandemic, he came under public scrutiny on his proposal on the coronavirus vaccine patent protections.
He and Buffet are close friends and no wonder they share the same position on cryptocurrencies but with a different concern. It focuses on the huge energy consumption caused by mining particularly of BTC (bitcoin). In his interview with The New York Times, he stated:
‘Bitcoin uses more electricity per transaction than any other method known to mankind.”
Some experts have issued warnings on the effect of crypto mining carbon footprint due to the use of dirty energy like coal. Elon Musk has temporarily suspended bitcoin payments to Tesla for the same reason.
Gates also raised concerns and warned others about crypto investments due to digital assets volatility. In his interview with Bloomberg Television, the billionaire philanthropist commented on Tesla’s BTC (bitcoin) holdings.
“Elon has tons of money and he’s very sophisticated, so I don’t worry that his Bitcoin will sort of randomly go up or down.”
He further added:
“I do think people get bought into these manias who may not have as much money to spare. My general thought would be that if you have less money than Elon, you should probably watch out.”
He is an American economist, professor, and columnist. He is a professor of economics at the Graduate Center of the City University of New York and a columnist for The New York Times. A recipient Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography in 2008. He was a professor of economics at MIT and Princeton University. He has also published several hundred columns on economic and political issues for The New York Times section Fortune and Slate. He was named as “favorite living economist under the age of 60” in a 2011 survey of economics professors. He has written on a wide range of economic issues including income distribution, taxation, macroeconomics, and international economics as a commentator. He placed second as the “most frequently cited author on college syllabi for economics courses” according to the Open Syllabus Project.
He earned his BA and graduated summa cum laude in economics from Yale University, where he was a National Merit Scholar in 1974. Later, he pursued a Ph.D. in economics from the Massachusetts Institute of Technology (MIT). In 1977, he completed his Ph.D. in three years with a thesis titled “Essays on flexible exchange rates”. While studying at MIT, he became part of a small group of MIT students sent to work for the Central Bank of Portugal for three months in the summer of 1976, during the chaotic aftermath of the Carnation Revolution. He received several awards and citations due to his excellent works which include the Howland Memorial Prize awarded by Yale University in 2010, EPI Distinguished Economist Award in 2011, and the Gerald Loeb Award for Commentary in the same year. The latest was in 2016, the Doctor of Letters, honoris causa conferred by the University of Oxford, Oxford, UK. He was among the 2012 FP Top 100 Global Thinkers “for wielding his acid pen against austerity” by the Foreign Policy.
Krugman’s concern on cryptocurrencies echoes that of Bill Gates. He has been a vocal skeptic particularly on BTC (bitcoin). Aside from the energy consumption, he also stated a lack of government backing. He also added that the cryptocurrency has failed to prove itself for more than 10 years.
“Twelve years on, cryptocurrencies play almost no role in normal economic activity. “
He further added:
“Almost the only time we hear about them being used as a means of payment — as opposed to speculative trading — is in association with illegal activity.”
That wraps up our list of cryptos’ biggest critics. Definitely, you will agree that you were amazed as much as we do on these guys’ portfolios. We heard their sentiments and concerns about why they disapprove of digital assets. In our next article, we will be featuring the top crypto supporters, fans, and believers, whatever you call it. Let’s hear straight from them why they actively support and invest in cryptocurrencies despite their risk.