Viewpoint: Misleading promises and hype have exacerbated the risks of cryptocurrencies.

Eswar Prasad, a professor at Cornell University's Dyson School and a senior fellow at the Brookings Institution, expressed great concern about the risks posed by the booming cryptocurrency market in an opinion piece published in the New York Times. Despite Bitcoin's recent surge to record highs and political support from figures such as former US President Donald Trump and current Vice President Kamala Harris, Eswar Prasad warned that cryptocurrencies today pose greater risks to investors and financial institutions than before. He pointed out that the relaxation of regulations by the US Securities and Exchange Commission (SEC) has made it easier for retail investors to enter the cryptocurrency market, but they are usually not fully aware of the risks involved. Eswar Prasad further emphasized the dangers of centralization in the crypto ecosystem, pointing to the collapse of FTX and Binance's legal disputes as examples of how centralized power can undermine the basic principles of decentralized finance. He also emphasized that "risks may spread from decentralized finance to traditional finance and vice versa," thereby bringing vulnerability to the entire financial system.