on the crypto
Notable economist and leading bitcoin critic Nouriel Roubini sent a provocative message to the US Securities and Exchange Commission, saying he should "keep an eye on" people like Tesla CEO Elon Musk for possible market manipulation cases. The claim comes following the electric car maker's recent decision to put bitcoin on its balance sheet, which has generated a liquidity tsunami in the crypto sector.
"Irresponsible behavior" or visionary?
Elon Musk has been tweeting on a number of occasions about bitcoin and dogecoin in recent weeks, at one point he even updated his popular Twitter profile bio by adding “#bitcoin”.
You're here (Tesla shares - ticker TSLA) filed its 10-K annual report with the U.S. Securities and Exchange Commission on Monday, claiming it bought about $ 1,5 billion worth of bitcoin (BTC) in January.
Roubini, a professor of economics at New York University, also criticized the "irresponsible behavior" of MicroStrategy CEO Michael Saylor for converting a significant portion of the business intelligence firm's cash reserves into bitcoin, given the volatility of the cryptocurrency.
MicroStrategy currently holds 71.079 BTC, according to a paper filed with the SEC earlier this month. In a recent interview, Roubini warned that bitcoin could "collapse" if cryptocurrency exchange Bitfinex and Tether, the issuer of the stablecoin tether (USDT), were indicted this year.
The Tether-Bitfinex case as a possible discriminator of a Bitcoin collapse
Tether (USDT) has an extraordinary market capitalization of $ 31 billion and is subject to numerous ongoing investigations, including by the US Department of Justice and the New York Attorney General's Office.
At the heart of the DOJ's criminal investigation into Tether as an organization is whether or not USDT can be used to inflate cryptocurrency markets. The Bitfinex exchange and Tether are strongly linked together as sister companies that share management and ownership. It is known that in 2018 Tether lent over $ 600 million to Bitfinex.
The loan was kept under wraps until April 2019, when the New York Attorney General's Office revealed that the exchange had diverted $ 850 million of client and corporate funds to the payment processor Crypto Capital Corp., temporarily covering the deficit thanks to Tether funds. Bitfinex said on Friday that it had repaid the remaining balance of a $ 550 million loan to its sister company.
Future perspectives
Looking ahead, Roubini's prediction is that the world will eventually "phase out cash" and the US will create an "electronic dollar". Central bank digital currencies will allow central bankers to quickly maneuver monetary policy, he said, and normalize negative rates in times of economic crisis.
