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Roubini brands bitcoin a 'ponzi game' in Twitter rant

by Danielle Levy on Mar 10, 2014 at 13:55

Roubini brands bitcoin a 'ponzi game' in Twitter rant

Renowned economist Nouriel Roubini has taken to Twitter to lambast virtual currency bitcoin, describing it as a 'ponzi game'.

Roubini, nicknamed Dr Doom on account of his bearish views, declared on the social media website that Bitcoin isn't a currency but rather a ponzi game and 'a conduit for criminal/illegal activities'.

He was keen clarify that Bitcoin isn't a store of value, as the virtual currency is not backed by assets. Other reasons to disregard Bitcoin included the fact it has no unit of account, as no price of goods and services are set in it. 'And given its volatility all who accept it convert it right back into $/€/¥,' Roubini explained.

In another update, he continued: 'Bitcoin bugs, like gold bugs are fanatics who speak of bitcoin in cult-like religious ways. Like gold bugs they have paranoid conspiracy views on the [US dollar].'

The credibility of Bitcoin has proved a hotly debated topic since its price rose during 2013. In early March it emerged that HMRC is considering dropping the 20% value-added tax on Bitcoin transactions.

Traders in the virtual currency had argued the VAT had made their businesses uncompetitive against foreign rivals, with the likes of Hugh Halford Thompson - founder of Bitcoin trading website QuickBitcoin - threatening to relocate his business overseas  

In late February, one of Bitcoin's major exchanges, Mt Gox, lost $500 million of customer deposits after it collapsed.

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