"Black Swan" author Nassim Nicholas Taleb says the cryptocurrency market is a tumor and the price of Bitcoin (CRYPTO: BTC) is being propped up by a cult.
What To Know: Taleb shared why he has a distaste for crypto Thursday on CNBC's "Squawk Box."
"It's a tumor ... and the property of a tumor is that it grows without control until it stops growing and kills the host or it self-destroys," he said.
The "Black Swan" author listed several reasons why he believes crypto has the same fate as a tumor.
Many people believe that Bitcoin is an inflation hedge, but it's not and it has shown that, Taleb said. When inflation went up, Bitcoin "collapsed" and is now trading well below its highs, he noted.
It's also not a method of payment, he said, adding that it's not being used for "real transactions."
People can use crypto for very small transactions, but it's not good for large amounts of money, and it's not good for money laundering because it's very traceable, Taleb said.
"And three, it is pretty much the first time in the history of the world that we have had a cult coupled with a financial instrument," he said.
Taleb told CNBC that he was actually positive on Bitcoin in its early days because he was "disappointed" with Federal Reserve policies, but it wasn't long before he realized that adopting crypto would actually be going from "something bad to something vastly worse."
Thanks to crypto, the Federal Reserve is focused on making transactions faster and easier for both individuals and corporations. He noted the Fed is planning to roll out a new payment system called FedNow, which will enable instant payments, he said.
Read Next: 'Black Swan' Author Nassim Nicholas Taleb Says Bitcoin 'Isn't Even Good' For Money Laundering
$BTC Price Action: Bitcoin is up nearly 20% over the last week. At the time of publication, it was up 0.92% over a 24-hour period at $29,714, according to Benzinga Pro.
Photo: Eivind Pedersen from Pixabay.
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