Shanghai Economist Says Bitcoin Is a Ponzi Scheme; Most People Will Lose Money

Renowned economist Andy Xie considers Bitcoin a massive Ponzi scheme that can potentially cause a crisis that is "worse than 2008."

The “Bitcoin is a scam” crowd just grew a little bigger as Andy Xie, a notable global economist based in Shanghai, joined their ranks and accused cryptocurrencies as a whole of being a massive fraud.

Xie said that digital currencies are currently experiencing a bubble and that it will pop over the next few years.

“This is a Ponzi scheme. The difference from the past ones is that it is global due to the internet and, hence, all the people in the world can join. This is why it can go way beyond other schemes,” he said.
In a way, it is easy to view something like Bitcoin as a Ponzi scheme if you consider the presumption that many old investors may have accumulated a significant amount of capital and might cash out at some point in the future.

It’s doubtful, however, that they will have a lot of influence on the Bitcoin market if they decide to jump ship, as there isn’t the cabal you’d expect to be in charge of the scheme, waiting for the right moment to pull their chips from the table.

On the other hand, over two-thirds of American Bitcoin holders have decided to keep holding onto the currency as it appreciates in value, and 10% of them want to cash out maybe ten years down the line.

We must also take into account the 4 million coins (out of the current almost-17 million) that have gone into an “abyss” and might never be used again because their owners either forgot that they had wallets or no longer have access to them.

However, Andy Xie urges governments to take action to protect their citizens from what he firmly believes is a major case of investment fraud.

“If the government wants to protect its people, it should limit their access to the market. Most people will lose money, and only a few smart operators will take all the money. How could a government allow its people to lose money on such a large scale? The Bitcoin bubble is a small part of this whole thing. As long as monetary policy is so loose, if not Bitcoin, there will be something else,” he added.
He considers that if governments do nothing to increase their interest rates and tighten monetary policy, the world will once again enter a crisis that “will be worse than 2008

author by Miguel Gomez
Source : https://cryptovest.com/news/shanghai-economist-says-bitcoin-is-a-ponzi-scheme-most-people-will-lose-money/