Stephen Roach is the latest addition to the voices on Wall Street bashing Bitcoin and proclaiming that cryptocurrencies have no future. According to him, Bitcoin is a dangerous bubble that will eventually burst.
Stephen Roach is not an ordinary man or a nobody. He is a prominent economist - he is well respected on Wall Street and beyond. Mr. Roach is a Yale University senior fellow and the former chairman and chief economist at investment bank Morgan Stanley for Asia. Naturally, when he speaks people listen to his advice.
On Tuesday, he appeared on CNBC's Rundown and had only harsh words for Bitcoin and people who invest in crypto-currencies. According to him, Bitcoin is a toxic concept for investors.
"This is a dangerous speculative bubble by any shadow or stretch of the imagination," he said.
He also expressed concerns about the crypto coin's volatility and recent ascension.
"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," he said.
CME, CBOE 'making things worse'
CME Group and CBOE, two huge financial institutions recently announced their intention to provide Bitcoin market futures. This expectation of institutional money into the Bitcoin market has made the coin surge to new levels. At the moment of writing this report, it is worth around $12,000.
Roach said this legitimization of Bitcoin exchanges is "somewhat dangerous" for investors, given a "lack of intrinsic underlying economic value to the concept."
"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."
Roach is not the only top financial expert to condemn Bitcoin. Jamie Dimon, the CEO of JP Morgan is a constant critic. A few months ago he called Bitcoin a "fraud" and said anyone "stupid" enough to put their money in it will lose in the end.
Winklevoss twins become Bitcoin billionaires
Bitcoin's ascent this year has been phenomenal. It has risen more than 1000% during the last 12 months, sustaining several massive dips and hard forks along the way. And making some people a lot of money too.
An example of this is the Winklevoss twins. Tyler and Cameron are high-profile internet investors and entrepreneurs. In 2011 they sued Mark Zuckerberg for stealing the idea of Facebook from them and got a $69 million settlement. They invested $11 million of this money in Bitcoin and now they are worth over $1 billion through Bitcoin alone.
However, these guys aren't the largest shareholders of Bitcoin. Roger Ver is believed to be holding 250,000 Bitcoins while Satoshi Nakamoto is believed to have about 1 million Bitcoins. That's a lot of money.