At least one person is definitely not jumping on the bitcoin bandwagon.
Nobel Prize-winning economist Joseph Stiglitz shared his view on the cryptocurrency in an interview with Bloomberg—and he’s not a fan. In the interview, he argued that “bitcoin is successful only because of its potential for circumvention, lack of oversight.” Without any government oversight, Stiglitz argued that “it ought to be outlawed,” as it “doesn’t serve any socially useful function.”
People around the world have been following bitcoin with excitement in recent weeks, as it quickly climbed $3,000 in a week, passing the $11,000 mark on Wednesday. Yet Stiglitz is of the opinion that despite the rapid growth of the cryptocurrency, bitcoin is simply a bubble waiting to burst. He told Bloomberg that it’s “going to give a lot of people a lot of exciting times as it rides up and then goes down.”
In particular, he noted that the value of bitcoin today is derived from the “expectation of what it will be tomorrow.” This unpredictability, combined with the possibility that government could “clamp down” on it at any moment, led Stiglitz to argue that bitcoin could collapse. His prediction has already showed signs of truth, as bitcoin plunged 20% just hours after breaking its all-time record on Wednesday.
Stiglitz received the Nobel Prize in Economics in 2001 for his analysis of markets with asymmetric information.