Former Federal Reserve Chairman Alan Greenspan According to cryptocurrency, “too dependent on the ‘biggest fool theory’ to be an ideal investment.” HoweverHe also noted that the crash at the FTX crypto-exchange was “pure fraud”It is not an inherent characteristic of crypto. He The FTX contagion is unlikely to extend outside the crypto space.
Alan Greenspan On CryptoFTX, the US, and. Economy
Former Federal Reserve Chairman Alan Greenspan In a Q&A session that ran for a year, he shared his thoughts on cryptocurrencies and the crash of the crypto exchange FTX. He also discussed the US economy. Advisors Capital Management This week.
Greenspan Five terms served as Chairman You can find the Board This is Governors You can find the Federal Reserve System From 1987 to 2006. He appoint Chairman By four different US Presidents. He joIned Advisors Capital Management in September 2016 Economic Advisor to an asset management company.
The Former Fed Chair has been asked about the FTX crash and whether he anticipates contagion. “I don’t expect the fallout from FTX to spread beyond cryptocurrency/NFT [non-fungible token] space,” Greenspan responded, citing “The information so far has been revealed. He This is why it is so important:
The FTX crash was not the result of lax risk management, inadequate accounting procedures, or some inherent characteristic of crypto – it was purely fraud.
“Fortunately, while FTX and similar companies have increased marketing of their products in recent years, the lack of widespread market reaction to FTX suggests that they are still fairly concentrated in the hands of a relatively small subset of investors,” Greenspan described. .
“In addition, the differences we observed after the bursting of the tech bubble and the bursting of the housing bubble clearly showed that credit-driven asset bubbles create much more contagion when they finally deflate,” He opined. “There doesn’t appear to be a significant amount of leverage dedicated to the cryptocurrency/NFT space at the moment, so I don’t expect the contagion to travel much beyond this particular asset class.”
The Former head of the Federal Reserve added:
Regarding The wider crypto universe: I find the asset type too reliant on the “biggest fool theory” It is not a desirable investment.
Greenspan Also, he shared his views regarding the US economy. Federal Reserve’s Fight against inflation Commenting On whether a recession is necessary to reduce inflation, as some economists suggested, he stated:
At the moment, a recession seems most likely.
HoweverHe does not think. “a Fed reversal that is substantial enough to avert at least a mild recession” It is recommended. “Wage To make a setback in inflation more permanent, increases and, by extension, employment must be slowed down. So We may be experiencing a temporary lull in inflation, but it is too late.” Greenspan concluded.
Do You agree with former Fed Chairman Alan Greenspan How do cryptocurrencies compare to the US economy? Let Let us know what you think in the comments section.
