Add another voice to the chorus calling bitcoin a dangerous bubble: that of Yale University senior fellow Stephen Roach.
Roach, who also used to be Morgan Stanley’s Asian chief, told CNBC that the cryptocurrency was a “dangerous speculative bubble by any shadow or stretch of the imagination” and a “toxic concept for investors.”
“I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career,” the economist said.
Vitor Constancio, the vice president of the European Central Bank, has compared the frenzy around the virtual currency with the tulip mania that broke many investors in 17th-century Holland.
Moves to begin the trading of bitcoin futures are also adding to fears over the effects of bitcoin speculation. Interactive Brokers’ Thomas Peterffy recently warned that bitcoin derivatives could lead to a new financial crisis.
Roach also seems to be in that camp, telling CNBC that this sort of legitimization was risky, given that there is no “intrinsic underlying economic value” to bitcoin. “Like all bubbles, they burst,” he said. “They go down, and the one who’s made the last investment gets hurt the most, there’s no question about it.”
Bitcoin’s ascent this year has certainly been dramatic. It began the year with a value of around $1,000 and is currently up to $11,650.