Bitcoin is a “social movement… an epidemic of enthusiasm” Shiller told Bloomberg anchor, Tom Keene, in response to his question, how generational is Bitcoin?
The Yale University Professor describes Bitcoin and other digital assets as being not only generational, but also ‘geographic’; explaining that the reach of this new technology is not only beginning to trend among the younger generations exclusively, but is gaining popularity across the globe.
Shiller also stated that digital assets are also starting to gain prominence in some of the world’s most prestigious fintech areas, as existing institutions begin to recognise its revolutionary potential.
“Silicon Valley is really into it. This to me shows that this is not a rational response to new information.”
Keene then directed the conversation towards whether Shiller believed Bitcoin was ‘a speculative bubble’, comparable to the 17th century Tulip bubble and the 18th century South Sea bubble. Surprisingly here, the nobel laureate actually agreed that “in some fundamental sense, yes” Bitcoin was in fact a similar speculation, however he argued that this doesn’t necessarily mean that its price is inevitably doomed.
“It is a speculative bubble, but that doesn’t mean it will go to zero. Speculative bubbles reoccur.”
He went on to add that when Bitcoin’s price slumped in 2013, many regarded that as the bubble bursting, however we now know that this wasn’t the case at all. All speculative bubbles rise and fall in value, commenting that even “tulips are still valued”.
In his defence of Bitcoin as a bubble, Shiller also included that it’s this bubble-like hype and attention has turned Bitcoin into this “remarkable social phenomenon” that we know today; allowing it’s principles to survive and flourish in today’s global economy.
Here he argued that while there are so many innovative engineering inventions out there in today’s market, no one is speaking about them because they have failed to attract this kind of mainstream attention.
“they’re not part of a bubble.. nor part of investor excitement, at the possibility of getting rich over this"
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