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Greenspan Says Bitcoin a Bubble Without Intrinsic Currency Value

Former Federal Reserve Chairman Alan Greenspan said Bitcoin prices are unsustainably high after surging 89-fold in a year and that the virtual money isn’t currency. 

“It’s a bubble,” Greenspan, 87, said today in a Bloomberg Television interview from Washington. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” 

Bitcoins, which exist as software and aren’t regulated by any country or banking authority, surged to a record $1,124.76 on Nov. 30. The currency has rallied on growing interest from investors, while merchants are starting to accept Bitcoins and U.S. officials have told lawmakers such payments could be a legitimate means of exchange. 

“I do not understand where the backing of Bitcoin is coming from,” the former Fed chief said. “There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it’s a government or an individual.” 

Source: Bloomberg