Bitcoin, the world’s largest digital coin by market capitalization, briefly popped back above the $8,000 mark, making a comeback from this year’s sell-off in which the digital currency markets have suffered through a period of heightened volatility on fears of more government regulation over the cryptocurrency space. As the crypto market looks to be headed for another comeback, Nobel Prize-winning economist Robert Shiller has indicated that he is extremely interested in bitcoin as a “sort of bubble” that represents more of a psychological experiment than a serious investment. (See also: Crypto Trading Is Skyrocketing in Japan.)
In an interview with CNBC, the Yale economics professor and co-founder of the Case-Shiller index said that while the bitcoin bubble will burst, it doesn’t mean that it will “burst forever” or disappear. In fact, he said, the cryptocurrency could be around for a while. While noting that he does not mean to dismiss cryptocurrency, as many bears have forecast it to crash to zero, Shiller called it “glamorous” and “another example of faddish human behavior.” Shiller said that bitcoin’s story “goes well beyond the merit of the idea,” suggesting that the price movement is more about emotions and excitement than “something that can be explained by the computer science department.”
Evidence of Mistrust
He added that many overlook the political nature of the bitcoin frenzy, indicating that in today’s market, with distrust of government at a high, investors like the idea of a currency with no government backing. “There’s big element of people who don’t trust the government anymore and they like the idea that this didn’t come from the government” but by some “real smart computer scientist,” said Shiller.
“It’s a great story for today’s markets,” he concluded.
At a price of $7,948.30 at 2:33 p.m. UTC, Bitcoin reflects a 60% decline from all-time highs reached in mid-December near $20,000. In the beginning of the decade, bitcoin was trading at less than a dollar, skyrocketing past $1,000 in early 2017 and returning over 1,300% to investors over the course of 2017. (See also: Santander Launches Blockchain Payments Service.)
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