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Economist Paul Krugman: "cryptocurrencies are a house built on sand"
Speaking to Fox News, Paul Krugman mentioned The Big Short, which was released in 2015.  The film was based on the best-selling book by American journalist Michael Lewis, which tells the story of the international financial crisis of the 2000s, which arose as a result of the collapse of the real estate market.  Real estate prices were extremely high, but this did not stop people.  The same situation is happening in the cryptocurrency market, Krugman explained.

The economist also recalled the May statements of the US Federal Trade Commission (FTC), which warned the public about the increase in the number of fraudulent cryptocurrency schemes.  Krugman called this another reason to question the usefulness of cryptocurrencies in the real world.

“Crypto assets are becoming the preferred means of making payments for many scammers.  Cryptocurrencies account for roughly one in four dollars lost to fraud.  Considering how small the use of digital assets in traditional financial transactions is, this is impressive,” Krugman said.

He criticized people who claim that crypto assets are the future of finance.  Introduced in 2009, bitcoin has not yet found significant practical use over the years, other than for illegal activities, Krugman said.  This further causes distrust of cryptocurrencies, the economist is perplexed.

“Cryptocurrencies have become a large asset class, and their supporters are increasing their political influence.  Therefore, for many, it sounds implausible that cryptocurrencies have no real value.  But it's just a house built on sand.  I remember the housing bubble and the mortgage crisis, so I can say that we have gone from a big short game to a big scam,” he said.

Krugman has been attacking cryptocurrencies for a long time.  Back in 2018, he called them the embodiment of an economic regression that throws the financial system back 300 years and introduces additional obstacles for it.  In January of this year, he drew a parallel between the current volatility of digital assets and the subprime crisis in the late 2000s in the US.

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