David Rosenberg Isn’t Crazy About BTC; Calls It a “Bubble”

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Bitcoin is doing well as of late. Extremely well one might say, and yet it’s still experiencing doubt from analysts such as David Rosenberg, a well-known economist who at the time of writing, claims bitcoin is trapped within a bubble.

David Rosenberg: Bitcoin Is in a Bubble

One of the big problems in Rosenberg’s mind is that people investing in bitcoin are simply doing so because it’s the thing to do right now. They have no idea what it is, how it works, or who even brought it to the financial table. He says that because the currency is rising, they want to get involved, but they’re not even aware of basic facts, which he says is a classic bubble element.

He comments:

You speak to most people that are asking me to put money in bitcoin, they can’t even tell you who the person was that developed it or even how it’s mined. It’s just a classic, follow-the-herd, extremely crowded trade. It’s in a massive bubble.

Another big issue for Rosenberg is bitcoin’s alleged supply. Bitcoin only has 21 million units in existence. At press time, roughly 18.5 million have been mined, which means just over two million are left before the bitcoin supply runs out. The good news is that this final unit isn’t slated to be extracted until the year 2140, roughly 120 years from now.

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At the same time, however, Rosenberg doubts this figure of 21 million will be a final mark considering there are possibly methods in place to somehow expand this number should it ever be hit. He appears to be hinting that anybody can potentially create more bitcoins, thereby making this 21 million number moot in the future. He mentions:

Everybody seems to believe that we’re going to get to that 21 million cap on the supply constraint, but there’s really nothing in the protocol to suggest that the supply of bitcoin can’t go up once we hit that limit.

Rosenberg isn’t the only doubter of bitcoin, though he does seem to be the only one using the dreaded “b” word (bubble) at the time of writing. Other men who are doubtful of bitcoin’s prowess and strength include billionaire investor Mark Cuban, who in a recent statement suggested that while bitcoin is investable, it is not the hedge tool so many analysts would have us believe it to be.

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Not a Hedge Tool?

He says:

My thoughts haven’t changed… No matter how much [bitcoin] fans want to pretend that it’s a hedge against doomsday scenarios, it is not. Countries will take steps to protect their currencies and their abilities to tax, so the more people believe this is anything more than a store of value, the more risk of government intervention they face.

Bitcoin is presently trading for more than $22,000 per unit.

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