Bitcoin has been around for a while now, and by “a while,” we mean that it had officially launched nine years ago. That’s right, nine years, of which, most were spent in varying levels of obscurity.
However, it was only recently, that the cryptocurrency started to get mainstream attention, mostly due to its unprecedented rise in value which finally prompted the world to take notice.
From financial markets to political institutions, from economic analysts to technological experts, everyone seems to be talking about Bitcoin these days.
However, not all attention and comments have been positive, and the list of Bitcoin critics keeps growing.
The latest name added to that category is Robert Shiller, a renowned Economist and Nobel Prize winner.
Bitcoin could collapse
Speaking to CNBC, Shiller shared his views about him not being able to see what to make of Bitcoin due to how it does not hold a value of its own.
He stated that this would remain the case “unless there is some common consensus” about the cryptocurrency’s value, unlike gold, an asset class that would still be valuable even if people stop investing in it.
Similarly to many others before him, Shiller was also quick to compare the current Bitcoin situation to the Dutch “tulip mania” from the 1600s.
To elaborate on the tulip mania, it originated from a frenzied demand of the flowers, in turn, it surged the prices to never-before-seen levels until the demand died down which caused the bubble to burst.
Shiller, however, had a more realistic view of the situation than people who say that Bitcoin will vanish completely.
He stated that the world still has tulips which sell at regular prices, and that could be the same case with Bitcoin, something which could go on for a century.
“We still pay for tulips even now and sometimes they get expensive.” He stated before adding that Bitcoin itself “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.”
Shiller has the credentials to get his comments taken seriously
Along with his Nobel Prize for his work on asset prices, Shiller also has his past analysis to provide weight to his current comments.
In 2007, Shiller shared his opinion on the economic market conditions at the time, and he deduced that the situation could lead to bankruptcy within the country.
An excerpt from Shiller’s analysis explains:
“The decline in US home prices closely resembles a bank run, which occurs when people, worried that their deposits will not be honored, hastily withdraw their money, thereby creating the very bankruptcy that they feared.”
A year later, Lehman Brothers Holdings, a leading financial institution, declared bankruptcy in 2008.
Does this mean that what Shiller says might come true?
While Shiller has the experience and the accolades to have these comments received with somberness by the Bitcoin community, it should be noted that this is not the first time that a famous figure has provided negative remarks about Bitcoin.
Jamie Dimon, the CEO of JPMorgan Chase had also compared Bitcoin to the tulip mania and had even gone as far as to call it “fraud,” but then backed down from his statement in a more recent interview by stating that the blockchain and the concept of cryptocurrency are very real. He further mentioned that he is not just that interested in the subject.
On the other hand, propagators of Bitcoin have a positive outlook on the subject, where the most notable comments came from Kay Van-Petersen, the same expert who had predicted Bitcoin’s significant increase in 2017.
In his recent comments, Van-Petersen had stated that Bitcoin could see a rise to $100,000 this year.
Another industry expert, Trace Mayer, had also shared a similar analysis of his own.