Robert Shiller, a Nobel Prize-winning economist, called bitcoin a “sort of bubble,” which is not to say it will burst.
Shiller, the 2013 recipient of the Nobel Prize in Economics for his work in “Trendspotting In Asset Markets,” made his comments on an interview for CNBC.
Shiller made his remarks shortly after bitcoin recorded a 15.94 percent increase in value, from $6,900 to $8,000. The price rose by $1,100 within a 30-minute window, as massive buy volumes emerged.
“It may be with us for a while,” Shiller said. “To me it’s another example of faddish human behavior.” He called it glamorous, but said he doesn’t mean to dismiss it.
“But it’s a story that I think goes way beyond the merit of the idea,” he said, adding that the reason people are excited about bitcoin is more psychological than something that can be explained by the computer science department.
‘Part Of It Is Political’
“I think that part of it is political,” he said, noting that it’s an area that economists tend to neglect. “There’s a big element of people who don’t trust the government anymore, and they like the idea that this didn’t come from the government. It came from some real smart computer scientists.”
“It’s a great story for today’s markets,” he said.
Shiller’s comments are consistent with others he has made in the past. In 2014 he called bitcoin an “inspiration” because of the computer science, but as a currency he said it would return us “to the dark ages.”
Shiller predicted both the dot-com bubble and the housing bubble. Prior to the popping of both of those bubbles, he published “Irrational Exuberance” that detailed the coming crashes.
Shiller Joins The Naysayers
Shiller is among several market watchers to question bitcoin’s long-term viability.
Ken Griffin, the billionaire founder and CEO of the Citadel hedge fund management firm, compared bitcoin’s December price surge to the tulip bulb bubble centuries ago in Holland.
Others naysayers include Jim Cramer, former hedge fund manager, best-selling author and host of Mad Money; Nouriel Roubini, an economics professor at New York University’s Stern School of Business; Katsunori Sago, the chief investment officer at Japan Post Bank; Societe Generale Deputy CEO Severin Cabannes; and Credit Suisse CEO Tidjane Thiam.
The most infamous quote of all is left to JP Morgan Chase CEO Jamie Dimon, who said bitcoin is a fraud, while Morgan Stanley chairman and CEO James Gorman has said bitcoin doesn’t quite deserve the attention it is getting.