Roubini, also known as Dr Doom, claims that some people will employ a market manipulation tactic known as “wash trading” to prop up bitcoin’s price.
Prominent economist Roubini believes that the price of bitcoin will go down to zero. The Roubini Macro Associates chairman, dubbed Dr Doom for his pessimistic economic predictions, called bitcoin’s plunge on Tuesday on Twitter posts.
In one of his posts he references a Congressional Hearing that will have Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), testify in front of lawmakers about digital currencies.
“Bitcoin crashing now to $6,100. And the US Hearing on cryptoscams is only a day away. So a $5k handle looks highly likely unless the crypto-manipulation gangs start pumping and dumping or wash trading again. So HODL nuts: be ready for a 75% loss from recent peaks.”
The economist said that ”HODL nuts” -people that hold rather than sell in times of great volatility on the crypto market- will hold bitcoin until the price crashes to zero.
“As expected Bitcoin now crashes below $6,000. Now the $5K handle is reached. And the US Congressional Hearing on Crypto-scams is still a day away. HODL nuts will hold their melting Bitcoins all the way down to ZERO while scammers and whales dump and run...”
Roubini also states that traders will use wash trading to prop up the value of bitcoin. Wash trading in the crypto market involves an investor which purchases and sells their own order to manipulate markets. Some fear that such tactic has been practiced on bitcoin exchanges.
He also questioned SEC and CTFC if they will investigate if such manipulative trading tactics.
The tweets followed comments that were made on Bloomberg last week, in which he named bitcoin ”biggest bubble in human history”.
The cryptocurrency market has seen as major sell-off in the past few days. Bitcoin’s price plummeted under $6000 for the first time since November on Tuesday. This dip influenced other major cryptocurrencies who also fell off their all-time highs.