Nassim Nicholas Taleb, a prominent mathematician, a former risk manager, a modern philosopher, and the author of several best-selling non-fiction books, one of which is titled “Black Swan,” recently took to Twitter in order to communicate one of his messages to his audience.
This time, he discussed how inexperienced investors enter the cryptocurrency market with unrealistically high expectations, as well as the reasons why this trend persists despite the many “opportunities” to lose money due to scams, volatility, and other factors.
Taleb tweeted that “the inexperienced tend to be Utopian” with cryptocurrencies and “other techbeciles”. The expert believes that the issue revolves around a question of perception. As one goes through life’s experiences, one tends not to notice the unpleasant aspects of those experiences and instead only sees things in a good and subjective light. However, when one looks back, everything is seen through the lens of “survivorship bias.”
A Crypto Fan Turned Into A Hater
Just a few years ago, Taleb was interested in cryptocurrencies and owned some himself. Back in April 2020, he encouraged Lebanese people to “use cryptocurrencies!” to get around the country’s financial system. A few months later, he vented his frustrations about Coinbase’s customer assistance on Twitter and then promptly deleted his account with the cryptocurrency exchange.
In addition, in light of the low Federal interest rate environment in which Millennials and Gen Z have grown up, he claimed in an interview with CNBC’s Squawk Box that people under the age of 40 don’t understand how the economy functions. Millennials and Gen Z are included in this group.
Taleb said, “I think that we’ve had 15 years—14 and a half years—of Disneyland that basically has destroyed the economic structure. Think about it—no interest rates. So anyone who’s say 40 years old […] has no experience in markets. Zero. They don’t know what the time value of money is.”
According to Taleb’s argument, the Federal Reserve of the United States cut interest rates far too drastically, and eventually, society will have to face the consequences of this decision. He said, “Zero interest rate for a long period of time, you are hurting the economy, you are creating bubbles, creating tumors like Bitcoin.”
By February 2021, Taleb had labeled Bitcoin “a failure” due to the volatility of the cryptocurrency and announced that he would be selling his Bitcoin. In April of the previous year, he continued his slide into the abyss of no-coinerdom by asserting that Bitcoin has elements of an open Ponzi scheme.
In spite of the fact that Taleb is currently advocating for people to return to regular economic life, he also noted that we are still far from stress. He said that Bitcoin is still in use, and the price has remained stable at $20,000 and it’s not at $1,000 or nothing.
