"Bitcoin Apocalypse Is Coming"...Warning From Roubini, Who Predicted the Lehman Crisis

"Trump's Policies Are Bringing Forward Crypto's Collapse"

Nouriel Roubini, Professor Emeritus at New York University who predicted the global financial crisis that began with the 2008 U.S. subprime mortgage meltdown and the bankruptcy of Wall Street investment bank Lehman Brothers, and who is also known as "Dr. Doom," has warned of the end of the cryptocurrency market, including Bitcoin.

Nouriel Roubini, Professor Emeritus at New York University.

On the 3rd (local time), Roubini, in a column titled "The Coming Crypto Apocalypse" contributed to the international opinion platform Project Syndicate, stressed that "while crypto will gradually evolve, the revolution promised by the crypto hucksters will not come."

In particular, he argued that U.S. President Donald Trump's pro-crypto policies will instead serve as a trigger that accelerates the collapse of the market. He explained, "Over the past year, amid geopolitical crises, the price of gold has risen by as much as 60%, while the value of Bitcoin has fallen 6% year-on-year," adding, "Bitcoin has once again been proven not to be a hedge, but a fake asset that amplifies risk."

He pinpointed the core cause of the coming crypto collapse as the "GENIUS Act," which President Trump signed into law in July last year. The GENIUS Act was introduced with the stated aim of securing stability by requiring that, when issuing cryptocurrencies, collateral assets such as cash or U.S. Treasury securities be deposited at a one-to-one ratio. However, it is ultimately being assessed as a move aimed at bringing cryptocurrencies into the regulatory mainstream. Roubini likened this to the "free banking era" of the 1800s, when U.S. private banks recklessly issued banknotes and then suffered a wave of bankruptcies.

He criticized, "As was the case back then, President Trump's incompetence and the industry's corrupt lobbying could destabilize the U.S. financial system and economy," and warned, "If the vulnerability of assets is exposed while stablecoins are operating without the benefit of central bank deposit insurance, a massive bank run will occur."

In fact, signs of crisis supporting Roubini's warning are emerging in the cryptocurrency market. Recently, major U.S. crypto lending firm Blockfills abruptly suspended customer deposits and withdrawals in the wake of a sharp plunge in Bitcoin's value. Blockfills is a large player whose annual transaction volume reached 61.1 billion dollars (about 88 trillion won) last year, and fears are spreading that this measure could replay the wave of bankruptcies seen during the "crypto winter" of 2022.

Through social media, Roubini argued that this incident is an example that reveals the structural flaws and opacity of the crypto industry, claiming that the industry is fundamentally fragile and faces the risk of cascading bankruptcies. He emphasized that regulators need to adopt much stronger investor protection measures.

In the market, Bitcoin has been seen recovering to the 70,000-dollar level on expectations of interest rate cuts following a decline in the U.S. Consumer Price Index (CPI), but Roubini drew a clear line, saying this is only a temporary phenomenon. He urged, "Policymakers in each country must recognize the structural risks inherent in crypto before it is too late."