'Dr. Doom' Calls Cryptos Biggest Bubble In History While Major Cryptos Shed $100 Billion USD+ Intraday

Photo: 'Dr. Doom' Calls Cryptos Biggest Bubble In History While Major Cryptos Shed $100 Billion USD+ Intraday

Nouriel Roubini didn't mince words when he sat down with Bloomberg's Tom Keene last Friday. The man who was famously bearish, and right, in the lead up to the crisis in 2008 feels that Bitcoin is “The biggest bubble in human history.”

These words were delivered on a day that saw broad based selling across a range of high flying asset classes, and at one point, the total market cap of the cryptocurrency market fell by as much as $175 Billion US Dollars from the previous day.

This selling frenzy was followed by a massive ramp higher, and at the time of writing, Bitcoin is hovering above $9,000 USD. The entire crypto space traded in sync with Bitcoin, and this seems to demonstrate how the entire sector is more or less seen as a proxy for Bitcoin.

The quality of the entire cryptocurrency and ICO market was described by Nouriel Roubini as being, “even worse” than Bitcoin, and representing “a bubble to the power of two or three.”

Harsh Market

In addition to the selling pressure that cryptos are under, there have been a few major blows to using and purchasing cryptos over the last week.

Pretty much every major US bank has created incentives not to use credit cards to fund crypto investment, if not banned their use outright. Bank of America (BoA) banned the use of their credit cards on crypto exchanges, and it looks like J.P. Morgan will ban the use of their cards for anything crypto as well on Sunday.

It is estimated that nearly 20% of US crypto buyers used a credit or debit card to fund their purchases, so these moves from major banks to halt this funding option could cause problems for potential buyers in the US going forward.

India seems to be taking their lead on crypto policy from China, and is looking into how to ban them.

Indian finance minister Arun Jaitley had this to say on the matter late last week, “The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.”

This policy action from the South Asian heavyweight comes on the heels of more bad news from China and South Korea, both of whom are looking to tighten the regulations on cryptos, or ban them entirely.

This Time It Could Be Different

As many Bitcoin market analysts have pointed out, this will not be the first time that the crypto space undergoes a large selloff.

But this is the first time that most of the world's largest governments and banks are looking for ways to stop the use of cryptos, and actively cutting off funding sources for the market. In all the prior market downturns, there was no active desire by powerful entities to crush the crypto space, and today, that seems to be changing.

The popularity of cryptos during the last 18 months could end up destroying the first generation, like Bitcoin, Ethernet and the like, as major players like Russia and the US FED enter the space with regulated exchanges and propitiatory cryptos like the CryptoRuble and FedCoin.

While many people who supported the crypto movement up to this point were fond of the decentralized nature of cryptocurrencies, the people who use them for trade settlement would likely prefer price stability over the near total secrecy first generation cryptos offered.

It is impossible to say where crypto prices are headed from here, but given the overt attempts by major governments and financial institutions to destroy their value, a major recovery seems unlikely anytime soon.