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Nobel Laureate Paul Krugman: How is this crypto market drop different from the 2008 subprime mortgage crisis?

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Paul Krugman, the 2008 Nobel Laureate in Economics, tweeted and shared his analysis of the comparison between the current cryptocurrency market and the 2008 subprime mortgage crisis.

Original author: Paul Krugman

Original compilation: 0x22, Rhythm BlockBeats

2008 Nobel Prize in Economics award winner paul Krugman tweeted and shared an analysis comparing the current cryptocurrency market to the 2008 subprime mortgage crisis. Before the specific analysis, he made it clear that cryptocurrency holders in the market think this is an opportunity to buy bottoms, and he does not make price predictions, but only analyzes data.

Comparison of asset losses

Crypto investors compare the current cryptocurrency market with the "crypto winter" of 2017-18, and believe that the two are comparable in terms of proportional changes. Looking at the subprime mortgage crisis and this decline in proportion, the current 1. Crypto market is much larger, about 1.5 trillion US dollars, and the encryption market has fallen to 500 billion US dollars, and 1.5 trillion US dollars only accounts for the U.S. of GDP 7%, 500 billion is only 2.3% of the U.S. GDP, compared with 60% of the U.S. GDP lost in the subprime mortgage crisis.

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Mining

About mining, although it is destructive to the environment and causes local energy shortage problem, but the overall economic proportion is still very low. In 2021, a total of 800,000 BTCs will be dug out, and at 50,000 US dollars each, it is only half of the GDP of the United States. 0.2%. Compare that with the subprime mortgage crisis, when residential investment was at its peak nearly 7 percent of U.S. GDP, and the U.S., which fell 4 percent during the crisis. GDP, after the decline, is still far higher than the proportion of the mining economy.