Nobel Prize Shiller considers Bitcoin Bubble could last 100 years

Robert Shiller, the Nobel Prize-winning Yale economist who predicted the housing bubble, says that he is mystified by the rise of Bitcoin—but ultimately regards the cryptocurrency as a speculative bubble that is likely to burst.

Speaking with CNBC, Yale professor Shiller questioned Bitcoin’s value, comparing it to the 17th century Tulip mania.

Shiller compared the extraordinary rise in Bitcoin, which surged from around $800 to over $19,000 in 2017, before plunging below $10,000 lately, to “Tulip mania.” That’s the bizarre period in 17th-century Holland when spiking demand and rampant speculation drove the price of tulips through the roof—before the market collapsed, of course.

He went on to cite gold’s value as an example, and how it would not completely erode if we discount it as an investment.

“It has no value at all unless there is some common consensus that it has value. Other things like gold would at least have some value if people didn’t see it as an investment.”
Previously, Shiller had pointed to the top digital currency by market capitalization as “the best example of a bubble.”

Shiller spoke about his uncertainty in a recent interview, suggesting that “[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.”

Interestingly, this is not the first time Shiller has been critical of Bitcoin. Last year he commented on the digital currency’s rise, attributing it to the mystery factor behind its creator and the peoples’ frustration with the existing financial system and status quo.

With Bitcoin, supporters hope for a future where they are in complete control of their finances as opposed to centralized governmental bodies. However, critics such as JPMorgan CEO Jamie Dimon have repeatedly stated that such a future would not come to pass, since governments would not allow economic control to slip away.

At the moment, Bitcoin and the whole cryptocurrency market is struggling under the pressure of regulations and bans from countries such as China and South Korea, which represent major trading hubs.

Last week, billionaire investing genius Warren Buffett also expressed confusion over the rise of Bitcoin and other cryptocurrencies, and predicted that the bubble would inevitably pop. “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said on CNBC. “When it happens or how or anything else, I don’t know.”

Nonetheless, some say that Bitcoin and rival cryptocurrencies like Ethereum and Ripple still have plenty of room to run. One analyst from Saxo Bank, which accurately forecast that Bitcoin would triple in value in 2017, recently said that Bitcoin could peak to over $50,000, or even $100,000 this year.

However, the same bank is predicting that Bitcoin could drop back to $1,000 before 2018 is over.