‘Big Short’ Author Michael Lewis On The Financial Crisis,…
Best-selling author and journalist Michael Lewis, known for writing “The Big Short,” “Moneyball” and “The Blind Side,” offered his perspective on the current financial landscape and the rapidly-changing world of cryptocurrency on stage today at Bitcoin 2023.
“When I first encountered the idea of being able to use the blockchain technology to disintermediate financial intermediaries, I thought, ‘thank God,’” Lewis said of his realizations when first researching Bitcoin. “There are lots of unnecessary hands touching money when financial transactions occur. They've just been kind of hard baked into the system.”
As the author of “The Big Short,” Lewis outlined the fundamental inequalities and short-sighted policies of the contemporary financial system that led to the economic crisis of 2007 and 2008. At Bitcoin 2023, he acknowledged how Bitcoin is designed as an escape from the problems that caused that crisis.
“If you go back to Satoshi’s original paper, you know, line one, paragraph two, you eliminate the need for a trusted financial intermediary,” Lewis said. “Clearly, the very beginning of the spirit of the enterprise is mistrust of existing financial institutions, well earned mistrust, on the backend of the financial crisis.”
Across his books and news reporting, Lewis has been praised for his ability to condense complicated financial concepts into digestible prose and demonstrate systemic issues through the experiences of the individuals within them. This skillset makes him uniquely qualified to digest and interpret the emerging cryptocurrency ecosystem, which experienced unprecedented turmoil last year with the implosion of numerous crypto projects, most notably FTX.
At Bitcoin 2023, he discussed his next book and movie project, which will focus on FTX, and described some of the insight he gained from spending time with former CEO Sam Bankman-Fried before and after its collapse.
“Not in a million years did I think I was going to write about Sam Bankman-Fried,” Lewis recalled, adding that he was first asked to meet with Bankman-Friend by a friend on Wall Street, and found himself intrigued by his unique personality. “There's so obviously the potential for a great movie in it… so you want to let people know it's out there.”
Lewis was joined on stage by Arthur Hayes, the co-founder of cryptocurrency exchange BitMEX. Hayes asked Lewis if he owned bitcoin, and Lewis quipped that it was “in the FTX bankruptcy.”
Hayes and Lewis also touched on the current banking crisis, with Lewis sharing the view that things have not really changed in the institutional system since 2008 — that, if anything, things are worse for retail investors.
“It seems inherently unstable right now,” he said. “You essentially created a handful of institutions that are too big to fail, and everyone knows their deposits are insured, so no other institution can actually compete in that environment… It’s not going to end until there’s some structural reform.”