Cryptocurrency has been called "the new subprime" by the New York Times.

 

Crypto investors, like subprime borrowers in 2008, need to be protected from themselves, according to Paul Krugman.

In an article for the New York Times, economist Paul Krugman found comparisons between cryptocurrency and the 2008 subprime mortgage crisis.

Krugman mentioned the roughly 50% drop in overall market cap since November 2021 highs in his scathing opinion post, adding that it's the ignorant investors who are suffering the most.

“But there’s growing evidence that the risks of crypto are falling disproportionately on people who don’t know what they are getting into and are poorly positioned to handle the downside.”

As a result, he compares the subprime mortgage crisis to digital currencies, seizing the opportunity to rehash contentious issues such as crypto's role in money laundering and tax evasion.

Krugman's main point is that "excluded groups" are getting themselves into risky financial situations for which they are not prepared or have the financial security to bear.

But Krugman doesn't understand why "excluded groups" are willing to risk it all in the first place.