Renowned economist Nouriel Roubini, widely known as “Dr. Doom” for his pessimistic market forecasts, has launched a renewed attack on bitcoin as the cryptocurrency experiences a sharp decline. According to an op-ed published in Project Syndicate, Roubini dismissed bitcoin as a “pseudo-asset class” and reiterated his long-held position that the digital token fails to function as a legitimate inflation hedge or currency.
Bitcoin traded around $67,400 on Wednesday, marking a steep 45% drop from its peak in late October. The cryptocurrency entered bear market territory late last year, prompting fresh scrutiny from critics who question its fundamental value proposition.
Bitcoin Fails as Currency, Roubini Argues
In his recent commentary, Roubini emphasized that calling bitcoin or any cryptocurrency a “currency” remains fundamentally flawed. The economist argued that digital assets are neither a unit of account, a scalable means of payment, nor a stable store of value—criteria typically required for true currency status.
Additionally, Roubini highlighted potential risks associated with cryptocurrency integration into traditional financial systems. He specifically criticized the GENIUS Act, landmark stablecoin legislation currently under consideration, suggesting it should be renamed the “Reckless Idiot Act” due to concerns about inadequate consumer protections.
Concerns Over Financial Stability Risks
The economist pointed to specific vulnerabilities in the proposed stablecoin framework, according to his analysis. The bill specifies that stablecoins would not benefit from lender-of-last-resort protections or deposit insurance, potentially exposing users to significant financial risks.
Furthermore, Roubini warned that allowing interest payments on stablecoins could “undermine the foundations of the banking system.” He suggested that mismanagement by unregulated entities could trigger bank runs and financial instability, describing the issue as both a political and financial stability concern.
History of Bitcoin Skepticism
This latest critique continues Roubini’s long-standing opposition to cryptocurrency markets. Previously, he has characterized bitcoin as a “Ponzi Game” associated with criminal activity and labeled it “the mother of all bubbles” during earlier market cycles.
However, the current market downturn has provided new ammunition for bitcoin skeptics. The digital asset’s pronounced sell-off has slashed its value nearly in half from recent highs, validating concerns about cryptocurrency volatility and price stability.
Market Outlook and Price Predictions
Meanwhile, some forecasters are projecting even steeper declines ahead for the flagship cryptocurrency. Should the current bear market deepen into a full bitcoin winter, certain analysts anticipate the token could drop to as low as $31,000, representing a more than 50% decline from current trading levels.
In contrast to cryptocurrency proponents who view bitcoin as digital gold or an inflation hedge, Roubini maintains that the asset’s extreme volatility undermines such comparisons. The recent price collapse has reignited debates about whether digital assets deserve a place in diversified investment portfolios.
The economist also raised concerns about bitcoin’s potential use in illegal transactions, echoing earlier criticisms about cryptocurrency’s role in facilitating illicit activity. These concerns have gained renewed attention as policymakers work to establish regulatory frameworks for digital assets.
Market observers will continue monitoring bitcoin’s price trajectory in coming weeks to determine whether the current sell-off represents a temporary correction or signals the beginning of an extended crypto winter. Regulatory developments surrounding the GENIUS Act and other cryptocurrency legislation may also influence future market sentiment, though the timeline for congressional action remains uncertain.
