Stock Market Guru Robert Shiller Sees a Future for Bitcoin

Nobel Peace Prize winning economist Robert Shiller is no fan of Bitcoin, once saying that the cryptocurrency represents a bubble soon to burst.

Now Shiller has changed his tune. Bitcoin is still a bubble, he says, but it’s one that potentially might never burst.

“I’m interested in Bitcoin as a sort of bubble. It doesn’t mean that it will disappear, that it’ll burst forever,” said Shiller. “It may be with us for a while.”

Shiller is best known for his work predicting the 1987 market crash, the dot-com collapse and the 2007 housing crash.

His academic work forms the basis of the field of behavioral finance, the study of the role emotions in finance and markets.

As cryptocurrency investment, trading and speculation continues, Shiller acknowledged that he was rash in highlighting their shortcomings.

“I don’t mean to dismiss it. Some smart people went into these and other cryptocurrencies,” he said.

Shiller nevertheless thinks people mostly love the anti-government association and rebelliousness of buying into cryptocurrencies.

People got carried away with the decentralized nature of Bitcoin without considering how sustainable an investment it might be, he argued.

“There’s a big element of people [who] don’t trust the government anymore. They like the idea that this didn’t come from the government. It came from some real smart computer scientist. It’s a great story for today’s markets.”

Faddish

Shiller explained that a psychological craze to hoard and invest in cryptocurrencies explained its popularity more than its investment value.

He still calls Bitcoin and cryptocurrencies in general a craze. “To me, it’s interesting as another example of faddish human behavior. It’s glamorous,” remarked Shiller.

The ideal of Bitcoin, its “story” as a decentralized digital currency, naturally appeals to investors and speculators.

“It’s the quality of the story that’s attracting all this interest, and it’s not necessarily sustainable. What’s driving the market?” asked Shiller.

“It’s not fundamentals. It’s not like this is a fundamentally important thing, this Bitcoin.”

Shiller once compared cryptocurrency mania to the Tulip bubble mania of the 17th century.

The value of Tulip bulbs from the Netherlands reached incredible highs before crashing. It remains one of the first examples of a global economic bubble.

Along with acknowledging the potential staying power of cryptocurrency investments, Shiller also commended the usefulness of blockchain technology.

Test Your Financial Advisor’s Loyalty with These Simple Questions

You have a financial advisor in order to make certain you have budgeted your money correctly, have planned for future financial needs, and, in some cases, to turn some of

Sell Puts the Smart Way: Get Out Before Expiration Nears

Selling put options can be a great way to help increase the value of your portfolio without taking on too much risk. At its core, a put sale allows investors

refinancing

4 Pros and 1 Con of Refinancing Your Home

Two years ago the 30-year fixed mortgage rate was 4.6%. Today it is 2.9%. If your mortgage is in the high threes, you should consider refinancing. Refinancing would lower your

Easy Finance Tip: How to Calculate Your Net Worth

To calculate your net worth, just subtract your liabilities (what you owe) from your assets (what you own). While the equation is simple, it's important to get a snapshot of

Just a Few Bad Market Years Can Slam Your Retirement: How to Cut Your Risk

I believe one very underappreciated risk for investors preparing for retirement is the concept of “sequence of returns.” Sequence of return risk is the danger that the timing of withdrawals

Tai Chi Can Benefits for Those with Chronic Diseases

The Chinese martial art of tai chi can be beneficial to people suffering with chronic illnesses, according to research in the British Journal of Sports Medicine (2015), conducted by Dr.

Two Measures of Options Volatility That Matter

Most people often have a notion of what volatility means. They understand, at least conceptually, that it has to do with data of situations that vary over time. Weather is

3 Financial Habits to Adopt Before You Retire

Nobody wants to work until the day they die. We all want to get to a point where we can simply sit down, relax, and enjoy life.  Consider adopting these

11 Ways Eating Limes Can Protect Your Eyes, Heart, Joints and More

Most of us hear lime and think Corona beer or ceviche. Surprisingly, this little bright green fruit has many excellent benefits for your health and wellness. Limes are often overlooked

Why You Should Take Social Security Early and Invest

Social Security is a government program, so it is unnecessarily complicated. Working or retired? Married or divorced or both? Disabled? Private or public employer? All these factors affect your Social

5 Benefits of Opening a Health Savings Account

The tax advantages of a healthcare savings account are like those of a traditional IRA, a Roth IRA, or a 529 college savings plan. The account can be used like

A Simple, Easy Way to Lower Your Blood Pressure

According to the American Diabetes Association, one in three Americans have high blood pressure, and this condition may lead to other chronic diseases like heart disease and diabetes. There are