Paul Krugman, winner of the 2008 Nobel Prize in Economics, shared an analysis of the current cryptocurrency market compared to the 2008 subprime mortgage crisis. Before the specific analysis, he made it clear that cryptocurrency holders in the market see this as a bargain-hunting opportunity, and he does not make price predictions, but only analyzes data.
Asset Loss Comparison
Crypto investors compared the current cryptocurrency market to the “crypto winter” of 2017-18, arguing that the two are comparable in terms of proportional changes. Looking at the subprime mortgage crisis and this fall in the same way, 1. The Crypto market is much larger, about 1.5 trillion US dollars, the encryption market has fallen by 500 billion US dollars, and 1.5 trillion US dollars only accounts for US GDP. 7%, 500 billion is only 2.3% of US GDP, while the subprime mortgage crisis lost 60% of US GDP.
Regarding mining, although it is destructive to the environment and causes local energy shortages, the overall economic contribution is still low. A total of 800,000 BTC will be mined in 2021, and at $50,000 each, it is only 0.2% of the US GDP. Compared with the subprime mortgage crisis, residential investment accounted for nearly 7% of the U.S. GDP at the peak, and the U.S. GDP dropped by 4% during the crisis. After the decline, it is still much higher than the proportion of the mining economy.
The leverage of cryptocurrencies is far less than the subprime mortgage crisis.
Overall, while somewhat similar, this fall in cryptocurrencies does not have the macro risk of the subprime mortgage crisis.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nobel-prize-winner-paul-krugman-what-is-the-difference-between-this-crypto-market-fall-and-the-2008-subprime-mortgage-crisis/
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