In a testimony for the hearing of the US Senate Committee on Banking, Housing and Community Affairs On Exploring the Cryptocurrency and Blockchain Ecosystem, he also said that blockchain was the most “over-hyped technology ever”.
He compared blockchain to a normal spreadsheet and database and said that it was only as effective as them, irrespective of whatever technology it was using.
The financial market expert, popularly known as Mr. Doom for his perpetual bearishness, said that we were in a post-apocalypse world following the cryptocurrency bubble burst a year ago.
He blames the wrong attention for the “maniacal frenzy” for buying Bitcoins and said that it was a breeding ground for illegal activities. He states in his testimony:
“Scammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders) tapped into clueless retail investors’ FOMO (“fear of missing out”), and took them for a ride selling them and dumping on them scam(my) crappy assets at the peak that then went into a bust and crash – in a matter of months – like you have not seen in any history of financial bubbles.”
Mr. Doom then goes on a wild goose chase mentioning the drop in prices of all cryptocurrencies. He quotes a study that had revealed that “81% of all ICOs were scams in the first place, 11% of them are dead or failing while only 8% of them are traded in exchanges” and calls the current state a true Crypt-Apocalypse.
For a currency to be valid, he says, they need to be a means of payment, should be a serviceable unit of account and a stable store of value. As the markets are volatile, he argues that Bitcoin can never be a currency. Investors and consumers would rather trade BTC to make a profit than use it as a day-to-day currency. He says:
“As is typical of a financial bubble, investors were buying cryptocurrencies not to use in transactions, but because they expected them to increase in value… It is so energy-intensive (and thus environmentally toxic) to produce, and carries such high transaction costs, that even Bitcoin conferences do not accept it as a valid form of payment.”
His testimony then goes on to explain why Bitcoin was deflationary. As they don’t have any intrinsic value and does not track a potential nominal GDP, they will undergo deflation sooner or later.