Nassim Nicholas Taleb, renowned author of “Black Swan,” has delivered a scathing critique of Bitcoin, specifically targeting its often-touted advantage: a capped supply of 21 million coins. His comments have sparked a lively debate within the cryptocurrency community, prompting a reevaluation of Bitcoin’s intrinsic worth.
Taleb’s Perspective: Taking to the social media platform X, Taleb did not mince words, directing his criticism towards what he coined as “bitdiots” – those who believe that an asset’s scarcity alone guarantees its investment value. According to Taleb, the error lies in conflating “necessary” with “sufficient.” He humorously cited examples like “pebbles from Skorpios, underwear worn by Churchill, books owned by Cary Grant” to illustrate his point.
The idea by #bitdiots that something Convex (antifragile) must be a good investment BECAUSE of limited supply is confused: NECESSARY ≠ SUFFICIENT.
Near Infinite # of things in limited supply: pebbles from Skorpios, underwear worn by Churchill, books owned by Cary Grant…
— Nassim Nicholas Taleb (@nntaleb) September 13, 2023
Shift in Stance: Taleb’s current viewpoint marks a departure from his earlier support for Bitcoin. Initially intrigued by the cryptocurrency during global financial upheaval and the “WhatsApp Revolution” in Lebanon, his enthusiasm has since waned. He now views Bitcoin as neither a secure haven nor a viable asset.
Bitcoin’s Limited Supply Significance: The concept of limited supply and digital scarcity has positioned Bitcoin as a potential store of value, often likened to gold. Investors and institutions consider it a “digital gold” capable of preserving wealth over time. A store of value is an asset that maintains its purchasing power over extended periods, making Bitcoin an appealing alternative to traditional stores of value, especially in times of economic uncertainty.
Taleb’s Unwavering Criticism: This isn’t the first time Taleb has voiced his disapproval of the cryptocurrency market. Recently, he condemned attempts to artificially inflate market prices, asserting that, ultimately, the market’s fundamentals prevail. He consistently refers to Bitcoin as a “magnet for idiots” and likens the cryptocurrency market to a “tumor.” His harsh assessments underscore his belief that Bitcoin’s allure stems more from speculation and hype than from any intrinsic value.
Conclusion: Nassim Nicholas Taleb’s critical perspective on Bitcoin’s finite supply serves as a potent reminder that the discussion surrounding the cryptocurrency’s value proposition remains dynamic and open-ended. It highlights the ongoing debate within the cryptocurrency community, with passionate advocates and critics offering contrasting visions of its future trajectory. As the landscape continues to evolve, Taleb’s critique encourages a deeper exploration of Bitcoin’s true worth.
Bitcoin pple, there is an old saying "nobody is bigger than the market".
You may artificially prop up the price; you may paint the tape by coordinated manipulation. But in fine the market is a market, an idiot is an idiot, & youth, inexperience, & ignorance are not virtues.
— Nassim Nicholas Taleb (@nntaleb) September 11, 2023