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Financial theorist and neurologist William Bernstein doesn’t believe that bitcoin fits the classic idea of a bubble; however, he claims he won’t be ‘wasting his time’ on it.
The former American neurologist turned to writing about investing during the 1990s. A few of his popular bestsellers include The Intelligent Asset Allocator, The Four Pillars of Investing: Lessons for Building a Winning Portfolio, and Rational Expectations: Asset Allocation for Investing Adults.
Yet, while he doesn’t think the digital currency shows textbook signs of a bubble, he remains ‘suspicious’ of it. According to him, it doesn’t fit all the four points of a bubble, reports CNBC. These are:
- It hasn’t become the main topic of social gatherings;
- People aren’t leaving their jobs to speculate in bitcoin; and
- Sceptics of the digital currency aren’t met with anger.
He claims that the only sign of a potential bubble is the fact that there have been some extreme price predictions.
In an interview with CNBC, Bernstein said:
Of the four key areas of investment knowledge — theory, history, psychology, and investment industry practices — the lack of historical knowledge is the one that causes the most damage.
According to him, bitcoin has ‘no intrinsic value,’ adding that its ‘a very bad sign’ to see that its price keeps rising.
As a result, he stated:
Bitcoin is not something I want to waste my time on. Unless [you are] an expert on blockchain technology and bitcoin, stay away. Don’t invest in things [you] don’t understand.
His comments join a growing list of critics against the digital currency. Most famous of them all is Jamie Dimon, JPMorgan Chase CEO, who said last month that bitcoin was ‘a fraud‘ and that it was ‘worth nothing.’
The cryptocurrency market has experienced a surge in price recently. At its highest, bitcoin has soared past the $6,000 mark, making its value worth more than Goldman Sachs, and helping to push the combined market value up to around $170 billion.
Featured image from Shutterstock.