Bitcoin will likely “totally collapse,” Nobel Prize-winning economist Robert Shiller has told CNBC, adding that it reminds him of “tulip mania” centuries ago in the Netherlands.
The Yale University professor said there are “bubbles everywhere,” not just in bitcoin, and added that he “doesn’t know what to make of bitcoin ultimately.”
“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,” Shiller told CNBC in an interview ahead of the World Economic Forum in Davos, Switzerland, where he will be speaking next week.
“It reminds me of the Tulip mania in Holland in the 1640s, and so the question is did that collapse? We still pay for tulips even now and sometimes they get expensive. (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 tulip craze in the Netherlands in the 17th century saw the price of the flower skyrocket. This resulted in a crash of that market in 1637. Some economists, such as Paul Donovan at UBS’ wealth management division, have likened the developments in bitcoin to the tulip bubble.
Shiller, who won the Nobel Prize for Economics in 2013 for his work on asset prices and inefficient markets, made the comments before bitcoin and other digital coins saw a huge sell-off earlier this week.
The economist is not the first to pour cold water on bitcoin, which saw it’s price rise over 1,000 percent in the last 12 months, according to CoinDesk, which tracks prices from cryptocurrency exchanges including Bitstamp, Coinbase, itBit and Bitfinex.
Source: Tech CNBC
Bitcoin could be here for 100 years but it's more likely to 'totally collapse,' Nobel laureate says