Tags: alan greenspan | bitcoin | digital | currency value | worth

Greenspan on Bitcoin: 'Humans Buy All Sorts of Things That Aren't Worth Anything'

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By    |   Wednesday, 06 Dec 2017 12:45 PM

Alan Greenspan, the former chairman of the Federal Reserve, said the digital currency bitcoin just doesn’t make sense to him and he isn’t swayed by its flavor-of-the-month investor status.

Greenspan also compared the digital currency the money issued by the Continental Congress in 1775 to finance the war effort.

Meanwhile, bitcoin extended its eye-popping rally on Wednesday, breaking above $12,000 to a record high despite questions about the cryptocurrency’s real value and worries about a dangerous bubble, Reuters reported.

However, Greenspan told CNBC that even something that is ultimately worthless can create real goods and services in the near-term.

"A significant share of it was creating real goods and services" despite the fact that it was ultimately worthless, said Greenspan, who mentioned he was co-writing a book about American history.

Whether this value is just ephemeral will depend on how many bitcoins there are to match demand, Greenspan said. Continental currency kept being issued to pay for revolutionary war efforts and ultimately collapsed in value.

"Humans buy all sorts of things that aren't worth anything," Greenspan said. "People gamble in casinos when the odds are against them. It has never stopped anybody."

Bitcoin received a boost after Friday’s announcement by the main U.S. derivatives regulator that it would allow CME Group and CBOE Global Markets to list bitcoin futures contracts.

The move opens the door to added regulation but also more mainstream adoption, as bitcoin futures and other derivatives would make it easier to trade the new asset class.

Bitcoin’s meteoric ascent of over 10-fold from below $1,000 at the start of the year has drawn regulatory scrutiny around the world.

Some high profile individuals such as Nobel Prize-winning economist Joseph Stiglitz have said the cryptocurrency should be outlawed.

“It took a long time to establish the methodology and the way bitcoin was traded. The original appeal came from the fact they were unregulated. However it’s clearly moved out of those shadows and into center stage,” said Mick McCarthy, CMC Markets’ chief market strategist in Sydney.

“We are in the throes of a bubble market, and one of the characteristics of a bubble market is that there is no way to know when the bubble will burst.”

The current craze for bitcoin, and cryptocurrencies in general, have been likened by some to the 17th century Dutch tulip mania and more recently the dotcom bubble.

Bitcoin was last up 4.48 percent at $12,200.40 on the Luxembourg-based Bitstamp exchange after surging to the record peak of $12,276.00.

“There is a lot of money flowing into bitcoin right now, mostly motivated by ”fear of missing out“ and greed,” said Leonhard Weese, president of the Bitcoin Association of Hong Kong.

(Newsmax wire services contributed to this report).

© 2017 Newsmax Finance. All rights reserved.

   
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Alan Greenspan, the former chairman of the Federal Reserve, said the digital currency bitcoin just doesn’t make sense to him and he isn’t swayed by its flavor-of-the-month investor status.
alan greenspan, bitcoin, digital, currency value, worth
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2017-45-06
Wednesday, 06 Dec 2017 12:45 PM
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