The crypto space has lost more than $2 trillion in value over the past year. But for crypto loyalists, this is just another Crypto Winter. Remember 2018—when Bitcoin prices dropped 80%, and the media called it “dead” over 90 times? Don’t worry, they say. The Fed is raising interest rates and inflation and recession fears are making investors skittish, so they’re simply pulling back.

The meltdown of the world’s second-largest crypto exchange, FTX, the blowup of Luna and its sister algorithmic stablecoin TerraUSD, and the collapse of high-profile crypto lenders like Celsius and BlockFi, are merely bumps in the road, crypto proponents argue. But William Quinn, a senior lecturer at Queens’ University Belfast whose research focuses on financial bubbles, isn’t so sure.

Quinn believes the cryptocurrency fervor of the past decade is either a “stupider bubble than any previous bubble” in financial history, or “a smarter Ponzi than any previous Ponzi”—or a third option.

“So we have two possibilities,” he wrote in an article on journalist David Gerard’s website last week. “And the truth is probably somewhere in the middle.”

Quinn, who wrote the book Boom and Bust: A Global History of Financial Bubbles in 2020, said that the cryptocurrency “bubble” doesn’t look like financial bubbles of the past.

The so-called “Tulip Mania” of the 17th century Dutch Golden Age was more of a “popular narrative” than a true financial bubble of modern scale, he said, arguing that it “made far too much sense to be compared to the crypto bubble.” And the dotcom bubble that began in the late ’90s is nothing but a “very flattering comparison” to crypto, according to the historian.

“The problem is that crypto and blockchain, unlike the internet, are simply not very useful,” he argued.

For Quinn, there may not be a financial bubble in history that is worth comparing to the cryptocurrency mania of the past decade—this could be something else entirely.

What makes the crypto bubble unique

Quinn writes that cryptocurrencies have three defining features that make them unique from past financial bubbles.

First, they have “no use-value” unless others are willing to accept them. Second, they don’t create cash flows. And third, some have mining costs that can only be paid in fiat, or government-issued, currencies. For example, Bitcoin miners typically buy electrical equipment, mining computers, and real estate with U.S. dollars.

“Not all major cryptocurrencies are exactly like this, but most are close,” Quinn wrote. “These are uniquely terrible characteristics for an investment.”

Quinn argued that these three unique characteristics mean the real question could be whether to classify crypto as a “fraud” or a “bubble.”

“Every previous bubble I’ve encountered has involved either a commodity, a collectible, or an asset with associated cash flows…[b]ecause historically, producing a financial asset with no associated cash flows and marketing it as an investment would have been considered fraud,” he wrote. “And a fraud and a bubble are two different things.”

Quinn is careful not to portray all cryptocurrencies in the same light. He writes that some, like Bitcoin, shouldn’t be considered frauds because they don’t have a main “perpetrator.”

“Bitcoin was created as a sincere—if somewhat unhinged—political project, and operates independently of its creator. It’s a bad investment in the same way that a fraud is a bad investment, but it’s not a fraud,” he wrote.

Blockchain’s proponents

Of course, for every crypto skeptic, there’s a supporter ready to counter their argument. Even some of Wall Street’s most respected investors have become crypto bulls. The billionaire hedge funder Bill Miller said in January of 2022 that he has 50% of his net worth in Bitcoin. In May, he called the cryptocurrency “insurance” against financial disasters on the Richer, Wiser, Happier podcast.

And the financial services industry has also leaned into blockchain technology in recent years. Visa’s current president, Ryan McInerney, who is set to become CEO in February, told Fortune’s Alan Murray in November that there may be “new use cases” for the blockchain in payments systems.

“We do a lot of work on different opportunities using the blockchain,” he said. We think it’s possible [it will be part of the future payment system], but we are in the very, very early innings. It’s yet to be seen.”

Carmelle Cadet, CEO of the fintech startup Emtech, told Fortune’s Sheryl Estrada in October that blockchain tech is the future and CFOs will likely adopt it in the coming years because it allows companies to account for assets and their ownership via a secure, decentralized ledger.

An improvement on past Ponzis?

Still, Quinn argues that most cryptocurrencies could be viewed as a form of “improvement on the traditional Ponzi scheme,” and he isn’t the only one with that perspective. JPMorgan Chase CEO Jamie Dimon made a similar claim in September of last year, calling cryptocurrencies “decentralized Ponzi schemes” in testimony to the U.S. House Committee on Financial Services.

“The notion that it’s good for anybody is unbelievable,” he said, arguing Bitcoin and other cryptocurrencies are “dangerous.”

And NYU professor emeritus Nouriel Roubini has repeatedly slammed cryptocurrencies for years, even calling them “Ponzi scams” and a form of “corrupt gambling” in recent interviews.

Cryptocurrencies like Bitcoin work the same way as Ponzi schemes, according to critics like Roubini and Quinn, with new investors paying out early investors because no actual cash flows are being produced.

This story was originally featured on Fortune.com

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