- Jim Cramer says investing in Bitcoin is like picking the Super Bowl winner
- Bitcoin’s value has risen tenfold since the start of the year
US TV investment guru Jim Cramer has slammed Bitcoin as ‘pure gambling’ and ‘Monopoly money’ and warned investors that they had a better chance of hitting a jackpot in Las Vegas o or predicting the winner of this season’s Super Bowl.
His comments were mirrored by Alan Greenspan, who also used the casino analogy to sum up the ‘irrationality’ of investing in Bitcoin.
The cryptocurrency has surged in value this year, rising more than tenfold from its starting point of $1,000 at the beginning of 2017. On Wednesday, Bitcoin broke through the $12,000 barrier and was trading at $15,129.99 at around 11am GMT on December 7.
But the rapid growth of Bitcoin has caused widespread concern about its real value and some of predicted the meteoric rise of the currency is nothing more than a bubble.
Cramer, who hosts the TV show ‘Mad Money’, said that despite Bitcoin’s increasing popularity the currency was not a worthwhile investment.
“It’s kind of like Monopoly Money…It’s just pure gambling at this point, I mean if you want to gamble, go to Vegas. Vegas is fabulous. I mean honestly, what’s the difference between bitcoin and trying to figure out the Super Bowl? I mean, it’s gambling,” he opined.
Cramer is not the first voice to be raised against Bitcoin as an investment. Nobel Prize winning economist Joseph Stiglitz has suggested that it should be banned, and many have likened the craze for cryptocurrencies to the dotcom bubble, with investors scrambling to climb onto the bandwagon, as noted by President of the Bitcoin Association of Hong Kong.
“There is a lot of money flowing into bitcoin right now, mostly motivated by ”fear of missing out“ and greed,” he said.
Alan Greenspan ‘fascinated’ by surge in Bitcoin
The revered former chairman of the US Federal Reserve, Alan Greenspan, who interestingly was in post during the dotcom bubble, is watching on with fascination.
“People gamble in casinos with the odds against them, and it doesn’t stop them” – Alan Greenspan on Bitcoin.
He told CNBC: “Bitcoin is really a fascinating example of how human beings create value, or estimate or judge value. And it’s not always rational.”
He said that it is not a rational currency, but the belief that it can be sold or unloaded on to somebody else has kept the market afloat.
He said that people buy in to things with little or no value all the time. “People gamble in casinos when the odds are stacked against them. It has never stopped anybody,” he said.
But for now, the Bitcoin boom appears to show no signs of slowing down, and was given another boost last week when the chief US derivatives regulator announced that it would be allowing CME Group and CBOE Global Markets to carry bitcoin futures contracts.
This development may result in more regulation of the cryptocurrency, but could also lead to Bitcoin becoming more mainstream.
Quite how far the bitcoin rises have to go is anyone’s guess at this stage, but it has certainly garnered huge publicity.
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