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Opinion: Nouriel Roubini’s statements to the Senate Banking Committee are an embarrassment [October 2018]

If you’ve been following the cryptocurrency discussions on social media, then you’ve probably heard a lot about Nouriel Roubini lately.

First, the Vitalik + LauraShin thread that went viral after Mr. Roubini declined having her as a moderator.

Then, countless other controversies involving Mr. Roubini have dominated the crypto scene during the past few days.

But nothing came close to striking us as hard as what we read in Nouriel Roubini’s written testimony to the US Senate.


Roubini, a well known and respected NYU scholar, used the term shitcoins, at a US Senate hearing, to describe unsuccessful ICO’s.

After using the word, Mr. Roubini  apologized for the use of the word “coins next to sh*t” because “the latter is actually useful as a fertilizer”.

These are actual quotes contained in Senate transcriptions.

As if it weren’t enough, the text continues reaching low points as he classifies cryptocurrencies, which are arguably the most fascinating technical advance since the Internet itself, as simply “garbage vaporware“.

Carnival Barkers

Mr. Roubini also called everyone who emitted crypto assets “scammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders) tapped into clueless retail investors’ FOMO (“fear of missing out”)”.

That is a verbatim quote from his testimony before a Senate Committee.

Mr. Roubini is obviously trying to make up for his complete lack of knowledge about cryptocurrencies by using foul language, stirring controversy and causing shock, while disrespecting the US Senate’s Committee on Banking, Housing and Community Affairs.

The profanity and strong adjectives were employed on purpose in order to cause maximum midiatic effect  and thus attract attention to what would otherwise be a dull, uninformative and boring contribution on the subject.

Point by Point

Let’s take a look at some of his comments, extracted verbatim from the text.

It is clear by now that Bitcoin and other cryptocurrencies represent the mother of all bubbles, which explains why literally every human being I met between Thanksgiving and Christmas of 2017 asked me first if they should buy them.

By this criteria we should assume Apple and Amazon stock are also financial bubbles?

Bitcoin was one of the most talked about technologies in 2017, it is natural that people would want to hear what a famed economist had to say about this technology. Sadly, as we now know, he probably heavily misinformed those who asked him about cryptos one year ago.

Tulip Mania

A chart of Bitcoin prices compared to other famous historical bubbles and scams – like Tulip-mania, the Mississippi Bubble, the South Sea Bubble – shows that the price increase of Bitcoin and other crypto junk-coins was 2X or 3X bigger than previous bubbles and the ensuing collapse and bust as fast and furious and deeper.

Aren’t times just a little different from the 1600’s when the tulip-mania happened? Bitcoin allows for any individual, anywhere on the planet, to exchange value with another individual, with absolute security, paying a few dollars for a fast and irreversible financial transaction.

While the 3 infamous financial bubbles listed did hurt thousands of naive and greedy investors in their respective regions, Bitcoin on the other hand has gained value from zero to over U$ 6000 in just under 8 years at the time of this writing.

For almost 8 whole years, the best hackers in the world have been trying to find flaws in Bitcoin and nobody has hacked it so far. This amazing technology is what Mr. Roubini compares to tulips and snake oil salesmen? That is a ludicrous comparison!

Bitcoin Price

Bitcoin rapidly exploded in 2017 from $1k to 10K and then peaked almost at $20K in December 2017 only to collapse to below $6k (down 70% from that peak) in a matter of four months and it has been close to $6k since then.

He conveniently “forgot” the period between 2011 and 2017 when Bitcoin had infinite valuation, going from zero to over U$ 6000 and having created tens of billionaires in the process!


The entire crypto-currency land has now gone into a crypto-apocalypse as the mother and father of all bubbles has now gone bust.

That is an absolutely false statement. At this moment the cryptocurrency market cap is worth over U$ 200 billion dollars.


Since the peak of the bubble late last year Bitcoin has fallen by about 70% in value (depending on the week). And that is generous. Other leading crypto-currencies such as Ether, EOS, Litecoin, XRP have fallen by over 80% (or more depending on the week).

Again, his confirmation bias is an attempt to mislead the members of the US Senate by not mentioning the fact that all these cryptocurrencies were worth ZERO before their launch.

There are literally tens of millionaires who built their wealth by investing in Ethereum, Litecoin, heck even Dogecoin!


No asset class in human history has ever experienced such a rapid boom and total utter bust and implosion that includes thousands of different crypto-assets.

No other famed economist in human history has had the audacity to present such utterly misleading statements before the US Senate before! There has been no “total utter bust”. Early investors in Bitcoin are billionaires today! This is an absolutely false statement being presented before the Upper House of US Congress!


To be a currency, Bitcoin – or any crypto -currencies – should be a serviceable unit of account, means of payments, and a stable store of value. It is none of those things. No one prices anything in Bitcoin.

Because we are at an early stage of adoption of a revolutionary technology? When credit cards first appeared, people made very similar statements about plastic money.

Illegal Use

Until now, Bitcoin’s only real use has been to facilitate illegal activities such as drug transactions, tax evasion, avoidance of capital controls, or money laundering.

If Nouriel Roubini presented these statements under oath, he’d be arrested. This is a completely false statement! To present just one counterproof here is a list of charities where you can donate using Bitcoin. In 2017 alone the volume of charity donations using Bitcoin soared 10-fold! It is absurd to go before a legislative body and say Bitcoin is only used for illegal activities.

A quick Google search will reveal tens of thousands of perfectly legal applications for Bitcoin and other cryptocurrencies.

Stone Age Barter

The idea that hundreds of cryptocurrencies could viably operate together not only contradicts the very concept of money with a single numeraire that can be used for the price discovery of the relative price of thousands of good ; it is utterly idiotic as the use of multiple numeraires is like the stone age of barter before money was created.

There’s so much wrong with this, I don’t know where to start. Today, there are literally hundreds of fiat currencies viably working together. The main difference being that central banks emit these currencies, instead of the decentralized emission used in Bitcoin.

Funny how the Zimbabwean Dollar, a “viable” currency in Roubini’s concept, destroyed billions of US dollars in value for the population of Zimbabwe between 1980 and 2009 when it was abandoned, yet it was freely tradable for US Dollars and Euros (in its last 9 years) in the fantastically safe international financial system which Roubini defends. What about the Venezuelan Peso or the Russian Rubble? Heck, the US Dollar itself has lost over 90% of its value over the last century!

Deflationary Supply

Supply of crypto is massive. Bitcoin is deflationary

The world is sitting on a U$ 164 trillion debt bomb yet Nouriel Roubini is concerned that the 21 million BTC supply is “massive”. Apparently it is fine for central banks to print money to pump financial markets, generating the greatest wealth inequality in the history of man, but cryptocurrencies are the scam! Today, 1% of the world population holds over 50% of the wealth on this planet. The people who run this system count on the Nouriel Roubinis of the world to keep this machine going.

Intrinsic Value

99.9% all crypto – currencies instead have no backing whatsoever of any sort and have no intrinsic value of any sort;

This, along with the shitcoin rant, is the kind of argument you’d expect from a drunk relative at a family reunion. It’s amazing to hear this coming from such a well known economist.

As soon as food or animal skin was traded for a token coined by a local blacksmith somewhere in our ancestors’ past, that token acquired some value. Token value used to be intrinsic, for example when US dollars represented gold bars in Fort Knox or when coins were made of valuable metals. Now, there is no such thing as intrinsic value for currency.

A US Dollar is merely a sheet of water resistant paper that represents a bit of America’s projection of power in the world. If the US adopted Bitcoin rather than these magical pieces of paper, Bitcoin would work just fine as a currency. For some magical reason, famous economists like Krugman, Stiglitz and Roubini do not want this to happen.

Deflationary Debt

That means if a steady – state supply of Bitcoin really did gradually replace a fiat currency, the price index of all goods and services would continuously fall. By extension, any nominal debt contract denominated in Bitcoin would rise in real value over time, leading to the kind of debt deflation that economist Irving Fisher believed precipitated the Great Depression. At the same time, nominal wages in Bitcoin would increase forever in real terms, regardless of productivity growth, adding further to the likelihood of an economic disaster.

It starts to become clearer and clearer, as you read Roubini’s arguments, that his mission before the Senate is to defend the status quo of currency emission. On this paragraph he’s setting up the stage to present his defense of policies like quantitative easing, also known as printing free money for bankers who lend us that money for 5% to 10% a year. His text now begins to read like a desperate defense of the system which enriched bankers more than any class in the history of mankind.

Today the average millenial will work 10 times more to buy a house than their relatives did 40 years ago. Yet this is OK, right?


Worse, cryptocurrencies in general are based on a false premise. According to its promoters, Bitcoin has a steady – state supply of 21 million units, so it cannot be debased like fiat currencies. But that claim is clearly fraudulent, considering that it has already forked off into several branches and spin-offs: Bitcoin Cash and Bitcoin Gold.

OMG. This is seriously cringeworthy. This guy does not understand what a software fork is. Does he know how many forks there are of the most popular open source projects? Does he know that this does not constitute fraud? Has Nouriel Roubini ever read an open source software license? We think not.

Ethereum Cartel

Ditto for the various forks and spin-off of Ether from the Ethereum cartel . It took a century for Coca Cola to create the new Coke and call the old one Coke Classic. But it took three years to Ethereum to dump the first ETH into Ethereum Classic and create and brand new spin-off, ETH.

Did he just compare software forks to the branding strategy of soft drinks? WAT!? Does he know how cryptos are forked into new projects? Does he know that the value in Bitcoin was diluted when Bitcoin Cash and others forked from it? No value was created or destroyed, it was transferred just like he’d teach in his Economics classes.

That is a seriously cringeworthy statement coming from a NYU professor. This should be academically called into question in a more serious forum.

He then goes on to defend central banking, stating that crisis were not caused by the banking system (I guess WE, The People, are to blame for subprime loans eh? We paid the bill after all…).

Pernicious Deflation

Crypto-currencies instead have not and will never have the tools to pursue economic and financial stability. The few like Bitcoin whose supply is truly constrained by an arbitrary mathematical rule will never be able to stabilize recessions, deflations and financial crises; they will rather lead to permanent and pernicious deflation.

Like we mentioned earlier, his central point seems to be the defense of letting banks print money as a cure for crisis. Brexit caused a market downturn? No problem, we can print more Euros. Japan’s economy stagflated? No problem, let’s print Yen until inflation starts to increase. Then we increase interest rates to control the inflation we just generated(!), so banks go laughing to the bank lending the free money they printed at higher rates. Banks create the problem, profit from the problem, then come up with some solution where we pay the bill and they profit even more. That’s the whole point of Nouriel Roubini’s statement to the US Senate, to defend the fake money system we have today.

Imploding Application

Now, compare this real and ongoing fintech revolution that has nothing to do with blockchain or crypto-currencies with the record of blockchain, which has existed for almost a decade, and still has only one failing and imploding application: cryptocurrencies.

I hope US Senators are familiar with an interesting search tool called Google, so they can easily search for “blockchain applications” to verify that this is a completely false statement.

Insecure PoS

Supporters of crypto have been promising forever – Buterin spoke of Proof of Stake (PoS) in 2013 – systems that are vastly scalable. But leaving aside that PoS is not live yet and Ethereum is still based on PoW, the reality is that once Proof of Stake is properly launched it will be massively centralized and thus not secure.

Proof of Stake is not live yet! Again this statement merely requires a quick search to be proven false. He failed to perform basic research in order to present his report to Congress. While Ethereum’s PoS is not live yet, this consensus mechanism is out there being used in several cryptocurrencies and has been proven secure so far.

As we all know, security depends on the peer review and attacks from researchers in order to be proven secure. So far these systems are working fine. How can he tell Senators that this system won’t be secure if he doesn’t have examples of PoS having failed in the manner he claims that it will fail? This is absurd!

HODLers are Suckers

This scammy eco-system is consistent with the idiotic crypto jargon: HODLers are suckers who have hold on their collapsing crypto-currencies even after they lost 90% of their value;

This is ridiculous. He’s actually taking issue with the fun jargon used in chat rooms and social media! And again he conveniently skipped the part where several “HODLers” who boarded the crypto train in 2011 are now billionaires.


We have no intention to demote Dr. Roubini’s image in any way, nor could we, given his standing as a respected scholar. But this exposition about cryptocurrencies before the US Congress is absurd. The research into specifics of cryptocurrencies was shallow and lacks basic knowledge of how cryptocurrencies work.

Few, if any, technologies ever developed are as democratic, decentralized and legitimately crowd-sourced as cryptocurrencies. It is a worldwide popular phenomenon that economists should try to understand, embrace and adopt rather than to dismiss in such a condescending manner.

The cryptocurrency world is eager to welcome top notch economists who have actually researched cryptos and understand their revolutionary potential. As always, the facts shall prevail over the FUD and immediate interests of bankers.


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About the Author
Published by Crypto Bill - Bill is a writer, geek, crypto-curious polyheurist, a dog's best friend and coffee addict. Information security expert, encryption software with interests in P2P networking, decentralized applications (dApps), smart contracts and crypto based payment solutions. Learn More About Us