The crypto space has lost more than $2 trillion in value over the past year. But for crypto loyalists, this is just another Crypto Winter. Remember 2018—when Bitcoin prices dropped 80%, and the media called it “dead” over 90 times? Don’t worry, they say. The Fed is raising interest rates and inflation and recession fears are making investors skittish, so they’re simply pulling back. The meltdown of the world’s second-largest crypto exchange, FTX, the blowup of Luna and its sister algorithmic stablecoin TerraUSD, and the collapse of high-profile crypto lenders like Celsius and BlockFi, are merely bumps in the road, crypto proponents argue. But William Quinn, a senior lecturer at Queens’ University Belfast whose research focuses on financial bubbles, isn’t so sure. Quinn believes the cryptocurrency fervor of the past decade is either a “stupider bubble than any previous bubble” in financial history, or “a smarter Ponzi than any previous Ponzi”—or a third option. “So we have two possibilities,” he wrote in an article on journalist David Gerard’s website last week. “And the truth is probably somewhere in the middle.” Quinn, who wrote the book Boom and Bust: A Global History of Financial Bubbles in 2020, said that the cryptocurrency “bubble” doesn’t look like financial bubbles of the past.
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