Cryptocurrencies have divided celebrity ranks into two camps, boosters and skeptics.
Gwyneth Paltrow, Snoop Dogg, Justin Bieber — All participate in a growing camp of crypto supporters. But digital assets have some critics, including the former “The OC” star. Ben McKenzieCo-author of a book on the risks posed by cryptocurrencies.
Best-selling author Michael Lewis, who includes a deeply reported chronicle of Wall Street thrills and flaws in 16 books, appears to be between the two camps.
In a new interview, Lewis warned that the value of cryptocurrencies could plummet dramatically and their widespread adoption could threaten traditional capital markets. But he also praised the cryptographic innovations he says can establish fairness among traders.
“Everything may collapse,” says Lewis, whose podcast “Against the Rules” has recently returned to its third season. “Cryptography is an act of faith-like gold, like a dollar.”
“It’s hard to judge whether the faith is sustainable-it’s impossible to judge,” he added. “But the longer it lasts, the greater the threat it poses to the existing fiscal order.”
So far this year the major stock indexes have suffered losses, but the widely held cryptocurrency Bitcoin (BTC-USD) And Ethereum (ETH-USD) A sharp decrease was seen. Bitcoin has fallen 16% so far this year, and Ethereum has fallen 21% as of early Wednesday morning.
However, crypto proponents have stated that volatility is expected in relatively new asset classes, often pointing out that regulatory uncertainty can help drive market volatility.
Treasury Secretary Janet Yellen last week Called Regarding the regulation of cryptocurrencies in a comprehensive speech, government intervention states that it will monitor the rapid spread of digital assets and prevent their illegal use.
Lewis, whose 2014 book raised criticism of the favorable use of high-frequency trading on Wall Street, said the crypto market improved the stock market in eliminating brokers that would otherwise benefit some traders. Said that there is a possibility.
Cryptocurrencies “eliminate intermediaries,” says Lewis. “If you are trading on a cryptocurrency exchange, you have an account on the exchange. Brokers who are moving things in and out of the exchange do not have an account.”
“No high-frequency trader is paying for cryptocurrency exchanges for faster information on exchanges,” he added. “Here, the entire stock market rigging is not happening.”