Bitcoin’s Price Trends Show It’s Now a Bubble, Harvard Economist Says

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Bitcoin’s price has gone up by 600 percent over the past 12 months, giving it a market value of $160 billion. But not everyone is feeling giddy about its prospects. “In my view, bitcoin is a bubble,” Harvard economist Kenneth Rogoff told The Guardian in an interview published on Thursday.

Bitcoin’s price has gone up by 600 percent over the past 12 months, giving it a market value of $160 billion. But not everyone is feeling giddy about its prospects. “In my view, bitcoin is a bubble,” Harvard economist Kenneth Rogoff told The Guardian in an interview published on Thursday.

He said that while the blockchain technology underpinning cryptocurrencies will continue to thrive, bitcoin itself is unlikely to survive in its current form due to the risks of hacks and scandals. Bitcoin has also been criticized for being too volatile for use as a currency.

“The current price still reflects speculation about what it could become rather than what it is,” he explained. “It may go to $20,000 and then $100,000 before it collapses.”

Rogoff’s comments come as bitcoin’s price continues to oscillate wildly: In just one week, it dropped by $2,000 before jumping back up by nearly $1,000 on Wednesday. The

The red-hot cryptocurrency’s price has tripled in 2017.

During the past few days, bitcoin prices surged to record highs. At the same time, there are reports of people getting mugged while meeting up with strangers to buy and sell cryptocurrencies.

Since bitcoin’s creation in 2009, its price has gone through a series of booms and busts, and it has been labeled a bubble by many economists. But Harvard economics professor Kenneth Rogoff says that the current cryptocurrency craze is different from anything we have seen before.

“The skyrocketing values are definitely speculative bubbles,” Rogoff told CNBC on Monday. “A lot of people could get hurt.”

Bitcoin was trading at $2,848 on Monday morning in Asia with a market cap of $46 billion, according to Coinmarketcap.com. Ether, another popular cryptocurrency that runs on the Ethereum blockchain network, was trading at $227 with a market cap of around $22 billion.

Harvard economics professor Kenneth Rogoff argued in a recent interview that Bitcoin is a bubble showing all the classic signs. But don’t worry, he says, it’s not going to bring down the economy.

Bitcoin prices are rising fast, and despite warnings from some experts about a bubble, one economist thinks that there’s still much more room for virtual currency to grow.

“I would say $100,000 [per Bitcoin] before 2020 is very much on the table,” Kenneth Rogoff, an economics professor at Harvard University told CNBC Monday. “I’m not saying that it will happen. I think it is a little bit of a bubble right now,” he added.

As of Tuesday morning, Bitcoin was trading up 2.6 percent over the last 24 hours at $18,333 according to data from Markets Insider. The cryptocurrency has surged nearly 1,900 percent in value this year so far.

Rogoff thinks that the cryptocurrency could become even more valuable as it gets adopted by more banks and institutional investors. Still, he warned there will likely be a crash at some point when Bitcoin investors start getting cold feet.

“When it happens or how or anything else I don’t know,” he said. “But I wouldn’t be surprised if in the long

Harvard economist Kenneth Rogoff says he believes bitcoin’s price will eventually collapse, but it won’t be a threat to the global financial system if it does.

Rogoff, who is also a former chief economist for the International Monetary Fund, told CNBC Tuesday that he thinks cryptocurrency and blockchain technology “are here to stay.” He went on to predict that the price of bitcoin and other digital tokens will likely fall by 80 percent at some point.

“I think bitcoin will be worth a tiny fraction of what it is now if we’re headed out 10 years from now … I would see $100 as being a lot more likely than $100,000 ten years from now,” Rogoff said in an interview on Squawk Box.

Bitcoin was trading at $7,331 Tuesday morning and has risen more than 740 percent year-to-date. The highest price for bitcoin since it began trading in 2010 was just under $20,000 in December 2017, according to Coindesk data.

In the past, Bitcoin has increased in value at times when there was uncertainty surrounding traditional currencies. The price rose as people worried about Greece leaving the Eurozone and devaluing the European currency. The price rose again after President Donald Trump’s election as investors worried his policies could lead to inflation and higher interest rates.

But Kenneth Rogoff, former chief economist at the International Monetary Fund, predicted that Bitcoin’s value is likely to collapse.

“I think Bitcoin will be worth a tiny fraction of what it is now if we’re headed out 10 years from now,” he told CNBC. “I would see $100 as being a lot more likely than $100,000 10 years from now.”

The Harvard professor said that because Bitcoin is not backed by any central bank, it’s hard to see how its value can keep increasing over time. “It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down,” he said

The price of Bitcoin has reached a new high, with one unit of the cryptocurrency now worth more than $2,200.

The digital currency has risen by 45 percent in the past two weeks and almost 400 percent since the start of the year. However, it has plunged by around 30 percent at some points during that time, underscoring how volatile it can be.

The latest rally comes amid ongoing interest in Bitcoin and other cryptocurrencies from investors and governments, who are exploring how they might use them to make payments or manage money.

As CNBC has reported previously, there is still a lot of debate among experts about where Bitcoin’s price is going next. Some think it could hit $1 million per coin within 10 years; others think it’s just a matter of time before prices crash.

One prominent economist believes that Bitcoin is “the biggest bubble in human history” and that its value will eventually fall to zero.

“This thing is going to evaporate like a mirage,” Kenneth Rogoff, a professor at Harvard University and former chief economist at the International Monetary Fund, told CNBC on Wednesday. “There will be a surrogate currency that gets adopted.”

“The issue with bitcoin is that it’s hard to see where the intrinsic value lies. It’s not just a question of whether the value will rise and fall, but what will make it rise and fall.

A bitcoin has no cash flow, so there’s no easy way to value it. Many investors say they’re buying it not because they expect to make lots of money, but because they like the idea of a currency that’s independent of governments and banks. That’s admirable, but when prices are rising so quickly, it could mean they’re buying into a bubble rather than an investment.”

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