Paul Krugman, an American economist and the winner of the Nobel Prize, compared the current state of the cryptocurrency market to the bubble in the US housing market and the mortgage-backed securities crisis that occurred in 2008. According to Krugman, digital currencies may be worthless. Such assets obtain large value and attract a lot of influencers. However, he believes that the crypto industry is "a house built not on sand, but on nothing at all." The economist is concerned about the difficult situation in the crypto market. Earlier, Krugman mentioned the popular book "The Big Short" and the movie based on it. It tells a story about investors who supposed a rise in home prices. These events took place years before the global financial crisis of 2008 when the housing market turned out to be a bubble. At the same time, Krugman points out that a lot of people do not fully understand how to use financial instruments and the laws of the global market. The economist cited the Federal Trade Commission (FTC), stating that many fraudsters use cryptocurrencies as means of payment. He also mentioned the collapse of algorithmic stablecoin TerraUSD (UST), arguing that the “stablecoin is neither stable nor a coin.” Notably, Krugman won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2008 for his “analysis of trade patterns and location of economic activity,” the Nobel Prize committee detailed. In November 2021, the cryptocurrency market capitalization peaked at $3 trillion. Early investors made huge profits from that. At the same time, renowned business schools offered blockchain courses. Meanwhile, several cities were competing to become the most crypto-friendly.
