They pulled zero punches.
In one of the strongest-worded takedowns of cryptocurrency we've come across, a pair of Johns Hopkins economics experts eviscerated the industry and argued it's "part cocaine" in a scathing takedown.
In a fiery Wall Street Journal op-ed, economics professor and outspoken crypto critic Steve Hanke and Matt Sekerke, a fellow at the university's economics school, argued that while the devastating 2022 crypto crash could've technically ended up worse, the existing links between traditional banks and crypto "show how easily a cryptocurrency crisis might spill over."
"Contrary to what its marketing wizards tell us, crypto is neither money nor a vehicle for finance," they expounded. "It’s an elaborate simulation of finance that produces gains and losses."
Comparing crypto to casino chips, the two experts argued that crypto is actually worse than gambling because, while people can pretty well guess the odds in a casino, "the odds in crypto are subject to gross manipulation."
And even government intervention wouldn't be able to redeem it, either.
"Regulation might stabilize the house odds and the exchange rate for chips such as stablecoins," they declared, "but it wouldn’t transform crypto into finance."
Burn, Baby, Burn
In a post-FTX world, there are, according to Sanke and Sekerke, two options: regulate crypto to tamp down its free-for-all nature, or let it burn. It's not hard to see which side the economists came out on.
"Regulating crypto would encourage denser, deeper connections, generating systemic risks," the pair wrote — and as such, they think the entire industry needs to be kiboshed by the government.
The JHU economists continued their elaborate metaphor, likening crypto to ozone-depleting chemical compounds, antiquated trash bonds, and, well, the financial industry's recreational drug of choice in the 1980s.
"Crypto is part chlorofluorocarbon, part cocaine and part bearer bond," Hanke and Serkeke concluded. "It isn’t the future of finance. More than malign neglect, the US needs policies that will eliminate cryptocurrencies and their metastases."
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More on crypto crusades: Influential Economist Tells Davos Elites That Crypto Is a Complete Scam
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