The popularity of Bitcoin may be growing. It’s value in the market may be rising significantly. Nonetheless, it doesn’t seem to be enough to impress Alan Greenspan. In fact, this particular digital currency only seems to confuse the former Federal Reserve Chairman.
As far as Greenspan is concerned, bitcoin is just like dollar currency issued during America’s Colonial past. During 1775, the so-called fiat currency derived its value through its demand and the amount of paper notes available. It was also not backed by a commodity like silver or gold.
The Continental currency was deemed worthless just several years later in 1782. Greenspan should remember nonetheless, that the 1775 newly adopted currency was not useless altogether. Before it lost its value, George Washington still managed to use the said currency to buy several necessities, including armaments.
Bitcoin Value Continues to Soar, Despite Greenspan Statement
Greenspan’s statement on the bitcoin comes at a time when the digital currency continues to soar in value. In 2017, its price has gone up by as much as 1,200 percent with the value approaching $13,000 in December. Several analysts also believe that the bitcoin’s value will continue to soar in 2018, even reaching as high as $60,000.
Despite his lack of enthusiasm and confidence in the bitcoin, Greenspan is not surprised that it continues to be popular along with other cryptocurrencies. “Human beings buy all sorts of things that aren’t worth anything,” he explained during an interview with CNBC.
Meanwhile, Greenspan also says that the bitcoin’s ability to sustain its value for a long time would depend on the number of bitcoins available to match demand. If you can recall, continental currency was continuously issued in order to pay for various Revolutionary War expenses. In time, the currency collapsed in value.
Another Economic Expert Echoes Greenspan’s Sentiment
In addition, former Asia chairman and chief economist at Morgan Stanley Stephen Roach also warned of cryptocurrencies being in a “dangerous speculative bubble” recently. For Yale University senior fellow, its sudden rise in value by more than 1,000 percent is cause for concern. In fact, he views the bitcoin as “somewhat dangerous” given that there is a “lack of intrinsic underlying economic value to the concept.”
Meanwhile, the markets give no signs of heeding to those experts, as the interest in the new currency on the block continues.