Bitcoin is an ineffective cult that not even bad guys want to join anymore, said the author of The Black Swan, a bestselling book on the extreme impact of outlier events. Cryptocurrency falls short on its claim to streamline payments, and doesnt even facilitate illegal transactions well, Nassim Taleb told Bloomberg on Thursday.
Its not even good for money laundering, he said. It is too traceable. Gold you can re-melt [into] bars, you can do something, but Bitcoin has a book entry somewhere that anyone with basic knowledge of statistics can triangularize.
The essayist assailed broader crypto culture, too, describing it as fanatical and dysfunctional.
It has transformed into a cult. The first time in history probably, were mixing money and cults, Taleb told Bloomberg. Usually you do cults with yogacults with music, but here is a cult with a financial product. These things dont go together well, because finance has some gravity rules that eventually end up hurting that model.
He added that crypto is a fad that falsely claims to be a refuge from regulation. Despite advertising itself as a haven from government oversight, Bitcoin is not even attracting the bad guys anymore, according to Taleb.
Taleb, a former options trader and risk analyst, has switched his stance on crypto over recent years. In 2019, he was an advocate for the currencys antiestablishment ethos. He disapproved of the Lebanese governments capital controls on banks, and lauded Bitcoin for existing outside central banking.
The most potent case for cryptocurrencies: Banks are never there when you need them, Taleb tweeted in 2019. And they are trying to bully the public so they avoid accountability and profit disbursements. Bankers are legal crooks.
Bitcoin currently trades at around $26,400, down about 12% from this time last year, and down 62% from its peak of over $68,000 in November 2021.
Taleb previously invested in Bitcoin, but in 2021 he began selling his crypto because he found the currency too volatile. He also tweeted that the Bitcoin community had been taken over by COVID-denying sociopaths with the sophistication of amoebas.
Ever since, the author has been vocal about his distaste for crypto and predicted its failure. On Tuesday, he compared Bitcoin to the Mafia, but said the Mafia was truer to its promise of protection than cryptocurrency.
Taleb also told Bloomberg that the Federal Reserve could pull the plug on crypto at any moment, and would replace Bitcoin next month. He said this in reference to FedNow, an instant payment service the Fed plans to introduce in July. FedNow will let individuals and businesses transfer money in real time and have access to the funds within seconds, according to a video by the Fed. The service, which does not necessarily replace crypto, will be released in phases starting next month.
Talebs comments on Bloomberg came on the same day that the founders of Binance and Coinbase, the two largest crypto trading platforms, lost close to a combined $2 billion after being hit with SEC lawsuits. Coinbase CEO Brian Armstrong lost $361 million, and Binance CEO Changpeng Zhao lost $1.4 billion.
Securities and Exchange Commission Chair Gary Gensler is suing Binance for alleged wash trading, when a company trades with itself to inflate volume. Meanwhile, hes suing Coinbase for allegedly selling unregistered tokens and acting as a broker, exchange, and clearinghouse without permission.
Taleb took aim at Coinbase on Thursday, replying to a tweet by the trading platform claiming it is easier to deliver a bag of money by plane than by wire transfer, and that crypto is a faster solution. Taleb responded by writing that the statement was a lie meant to fool those who dont do wire transfers.
