Paul Krugman knows a thing or two about the economy, and his opinion about who is losing money in cryptocurrencies is pretty alarming.
The numbers aren't big enough to threaten the financial system, according to Krugman.
Krugman is a professor at the Luxembourg Income Study Center at the City University of New York. He won a prize for his work on international trade theory.
Krugman is a guy who knows a lot about the Great Recession and markets that cause trouble. The experience should make your ears perk up, because Krugman says the current crisis is similar to the collapse of the economy in the 2000s.
A simple definition can help us understand Krugman's point better. In the 2000s, a lot of the mortgages were given to people who couldn't afford them. The entire US was affected by the financial crisis because homeowners didn't understand what they were getting into.
While Krugman doesn't think we're going for another recession because ofcryptocurrencies, he does think that NFTs and other tech is popular with the working class and marginalized groups.
The ease with which less experience investors can lose thousands of real dollars makes the coin feel a bit like the 2000s. People who can't afford to lose a lot of money are hopping on board a trend that could drain their resources quickly.
Krugman says it's okay for investors with the resources to remain stable to bet against skeptics, but still call for a safety net to protect everyday people from disaster.
If you ask me, regulators have made the same mistake as they did on the mortgage market: They failed to protect the public against financial products nobody understood, and many vulnerable families may end up paying the price.
There are more on the failures of cryptocurrencies.
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