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How Crypto Became the New Subprime
By artappraiser on Fri, 01/28/2022 - 11:54am |By PAUL KRUGMAN @ NYTimes.com, Jan. 27
[....] Crypto is unlikely to cause an overall economic crisis. It’s a big world out there, and even $1.3 trillion in losses is only about six percent of U.S. gross domestic product, a hit that’s an order of magnitude smaller than the effects of falling home prices when the housing bubble burst. And activities like Bitcoin mining, while environmentally destructive, are economically trivial compared with home-building, whose plunge played a large role in causing the Great Recession.
Still, some people are being hurt. Who are they?
Investors in crypto seem to be different from investors in other risky assets, like stocks, who consist disproportionately of affluent, college-educated whites. According to a survey by the research organization NORC, 44 percent of crypto investors are nonwhite, and 55 percent don’t have a college degree. This matches up with anecdotal evidence that crypto investing has become remarkably popular among minority groups and the working class [....]
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