American economist and cryptocurrency critic Nouriel Roubini said bitcoin will never reach the status of “digital gold”, despite more and more institutions amassing it as a storehouse of value.
In an interview with Kitco News, Roubini stated that bitcoin has no utility and lacks use-cases like gold. Moreover, its volatility eliminates the possibility of using it as a store of value.
According to Nouriel, gold has proved to be stable over time in situations of high inflation and financial crisis. According to Roubini:
Bitcoin has no value. It has no users, it is not even a means of payment, it is not a stable store of value. There is no utility. Nobody wears bitcoin jewelry; it’s cheesy, so how can you even price it? What is its fundamental value? For every other asset, you have a set of economic fundamentals that can justify it. So the idea that Bitcoin is digital gold, in my opinion, makes no sense. And by the way, whenever there is a risk of episodes, Bitcoin drops more than other risky assets.
Roubini predicts the bubble will burst
Roubini maintains that bitcoin and cryptocurrencies are a bubble that will soon burst. According to him, despite having a market cap of over $ 2 trillion, crypto will not have an impact on the financial sector. If the bubble bursts, it will mainly affect individual investors, he added.
Additionally, Roubini listed several other factors that will cause the cryptocurrency sector to collapse. Among them were, among others stock market correction. According to the economist, the sector will experience a sell-off mainly due to regulation. However, it will not be a quick process, and it will be a gradual process.
Roubini has in the past referred to digital assets as a Ponzi scheme. Now he added that the advent of central bank digital currencies (CBDC) will cause cryptocurrencies to collapse. Roubini notes that CBDCs will be better than cryptocurrencies and will have wider application even in the private sector.
Microstrategy CEO Michael Saylor has said in the past that bitcoin is an excellent store of value. According to him, it will not pose a direct threat in the coming years. MicroStrategy was a pioneer among institutional investors in the digital currency sector.