“Black Swan” Author Slams Bitcoin as a Fad

Alex Dovbnya

Bitcoin recently experienced an uptick following a legal victory by Grayscale against the U.S. SEC

Nassim Nicholas Taleb, author of the seminal risk analysis book “Black Swan,” recently warned of an impending demise for Bitcoin, the top cryptocurrency.

After the popularity of a fad—like Bitcoin—diminishes, those who had been its most ardent supporters often claim that its downfall was predictable, Taleb wrote on X. 

According to data from CryptoQuant, Bitcoin’s trading volume on all exchanges collapsed in late August, recording a staggering 94% decrease from March. 

Taleb also recently took to social media to argue that Bitcoin’s eventual downfall would not be caused by a market crash, but by “inexorable decay.” He stated, “Fads are more threatened by indifference than by disgust.”

The scholar’s comments come at a peculiar time for Bitcoin, which is up more than 6% today following Grayscale’s victory against the U.S. Securities and Exchange Commission. 

Despite the recent one-day sell-off on Aug. 17, which was the biggest since November’s FTX fallout, long-term investors appear to remain relatively unshaken. 

Nonetheless, Taleb contends that as trading volume diminishes, the risk of market manipulation escalates, a situation he likens to how “Open Ponzis implode.” He earlier highlighted that Bitcoin’s trading volume had dropped by over 85% from its peak.

Experts like Julio Moreno, head of research at CryptoQuant, suggest that low trading volumes are typical in bear markets and are likely to pick up in a bull market, but Taleb’s warnings point to the fact that Bitcoin could be potentially entering an ice age. 

Some analysts even claim that the market is not necessarily bearish, and the underwhelming price action could be attributed to the lack of major catalysts. The potential approval of a spot Bitcoin ETF could potentially change that. 

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