‘This Is How Open Ponzis Implode’

Nassim Nicholas Taleb, the influential author of “Black Swan,” took to Twitter to share his views on Bitcoin’s recent decline. Drawing attention to a significant drop in BTC volume — over 85% from its peak — he suggested that as volume diminishes, manipulation on the market can increase.

“As volume drops, manipulations become easier but, at some point, manipulators will need to exit,” Taleb commented, concluding with this stark statement: “This is how Open Ponzis implode.”

His observations align with recent data from Coinbase, one of the leading cryptocurrency exchanges. The platform’s Q2 earnings report for 2023 revealed that both consumer and institutional trading volumes have decreased drastically, down by 70% compared to the previous year.

Factors like an enduring “crypto winter” and a slew of lawsuits filed by the Securities and Exchange Commission (SEC) could further challenge the industry.

Adding to the apprehension is the current stability, or rather the lack of volatility, in Bitcoin’s price. Glassnode, an on-chain market analysis firm, highlighted the ongoing “extreme volatility compression” on the market.

Moreover, as of Aug. 11, Bitcoin’s price lingers below the crucial $30,000 mark, a level that had long served as a support barrier.

Mike Crosbie, CEO of digital asset exchange Blackfridge, noted that Bitcoin was holding precariously just below the significant $30,000 mark. He told Barron’s that there was still a possibility for Bitcoin to attempt an upward break of this level, but that chance diminishes with each passing day.

It is worth noting that Taleb’s skepticism around cryptocurrency is not surprising since he is a longtime skeptic. Back in June, he made a cheeky comparison, stating, “The main difference between Bitcoin and the mafia is that the mafia tended to deliver on its promise to offer protection.”