Popular “Black Swan” author Nassim Nicholas Taleb has raised concerns about the sustainability of Bitcoin’s recent bull run, pointing to a severe drop in liquidity as a warning sign.
Despite cryptocurrencies’ impressive double-digit gains this year, Taleb’s analysis suggests the market may be rolling, with liquidity in the crypto market hitting a 10-month low.
The drop in liquidity has been exacerbated by concerns in the banking sector recently, with U.S. exchanges being hit the hardest by shutting down U.S. payment lines and banking e-money.
Market makers in the region are facing unprecedented challenges. Dollar pairs also tend to be similar, but with increased volatility due to uncertainty in the US.
Taleb has been an outspoken critic of cryptocurrencies in the past, often highlighting what he sees as inherent flaws in the concept.
In an earlier tweet, Taleb scoffed at headlines reporting bitcoin’s price drop due to uncertainty, arguing that it contradicts claims that cryptocurrencies are “confrontational.”
The author is also grateful for the messages he has received from individuals claiming that he has saved them from investing in Bitcoin, which they believe will result in significant losses.
Despite Bitcoin’s current gains, Taleb’s warning of dwindling liquidity suggests investors should remain cautious.
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According to USA Today