'Retail suckers' with FOMO will eventually get crushed on Bitcoin, says Roubini

Famed economist Nouriel Roubini argues that retail investors with “fear of missing out” are going to get crushed by investing in Bitcoin during its latest run higher.

“We have, like in 2017, hundreds of thousands of retail suckers that are having FOMO (fear of missing out) going into this asset class. And they are going to buy it at peak like it happened in December of 2017 when it was $20,000 and fell to $3,000 by the end of the next year. So, it’s the same phenomenon — just people are moving in because of FOMO, feeding the bubble, manipulation, eventually, they’ll get crushed,” Roubini told Yahoo Finance Live on Monday.

The NYU Stern professor of economics argued that Bitcoin’s surge is driven by “massive manipulation,” not a rush into a hedge against inflation.

“I think that some of the movement upward is driven not by worries about inflation or debasement of fiat currencies because gold is not going up very much, TIPS (Treasury Inflation-Protected Securities) are not going up very much. Why would just Bitcoin be a hedge against inflation and a debasement of fiat currency? There must be something else — something else is there is massive manipulation,” Roubini said.

Roubini, whose nickname is “Dr. Doom,” has argued that Bitcoin and other cryptocurrencies, which he’s dubbed as “sh-tcoins,” have no place in a retail or institutional investors’ portfolio. He pointed to the “huge amount of volatility” as a reason for concern.

“You have to ask yourself whether retail investors or institutional investors should be investing in something that is so risky and something that is not a currency and is not even an asset,” Roubini added.

Bitcoin (BTC-USD) hit a high over the weekend of $58,367 per coin before dropping as low as $46,616 on Monday. The digital asset was last trading above $54,000 at the time of this publication, still down from its recent highs.

“The reality is nobody knows what the value of this pseudo-asset is. It doesn’t have any value cause it doesn’t have any income, doesn’t have any use, doesn’t have any utility. So it’s a speculative play on a bubble that is self-fulfilling,” Roubini added.

This article originally appeared on Yahoo! Finance.


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