Nobel Laureate Shiller Predicts Total Collapse For Bitcoin: Report
19 January 2018 - 07:31PM
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Bitcoin may "totally collapse" though it may linger for a
century, Nobel Laureate Robert Shiller said, who equaled it to the
Tulip mania.
"[Bitcoin] might totally collapse and be forgotten and I think
that's a good likely outcome but it could linger on for a good long
time, it could be here in 100 years," the Yale University professor
told CNBC in an interview in Davos, Switzerland.
"It reminds me of the Tulip mania in Holland in the 1640s...,"
he said.
Tulip mania saw contract prices for some bulbs of the new and
fashionable tulip shoot through the roof and eventually collapse in
February 1637. In a parallel to the current cryptocurrency boom,
speculation and FOMO or the fear of missing out, played a major
role in driving up prices of the exotic flower.
Shiller, who was the joint winner of the 2013 Nobel Prize for
economics, pointed out that bitcoin has no value at all "unless
there is some common consensus that it has value."
In contrast, assets such as gold would at least have some value
even if people did not view it as an investment, the economist
added.
The CNBC stated that the interview was conducted ahead of the
massive sell-off in cryptocurrencies this week over concerns of
possible stringent regulation in South Korea and China.
"The Bitcoin market is a marvelous case study in ambiguity and
animal spirits," Shiller wrote in an op-ed in the New York Times
mid-December, when the price of the leading cryptocurrency was
approaching its peak of above $19,800.
A rational appraisal of an asset's value was simply not possible
at present with Bitcoin and the real understanding of the economic
issues underlying the cryptocurrency was almost nonexistent, he
wrote.
Traditional finance has kept cryptocurrencies at arm's length,
but many investors and bankers are positive about the future for
the distributed ledger technology or blockchain that underlies
them.
Recently, billionaire investor Warren Buffett warned that
cryptocurrencies are set to have a bad ending and he would not bet
any money on them.
Jamie Dimon, who is JP Morgan Chase CEO and chairman, regretted
calling Bitcoin "a fraud" earlier, but expressed little interest in
investing in cryptocurrencies.
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