- Stephen Roach, a widely regarded economist, had harsh words about bitcoin as an investment in a Tuesday interview with CNBC
- "This is a dangerous speculative bubble by any shadow or stretch of the imagination," he said
With the price of bitcoin moving toward $12,000, a top economist on Tuesday sent a stark warning to investors: The cryptocurrency is in a "dangerous speculative bubble."
"This is a toxic concept for investors," said Stephen Roach, Yale University senior fellow and the former Asia chairman and chief economist at investment bank Morgan Stanley.
Roach, described by Yale as one of Wall Street's most influential economists, spent the bulk of his 30-year career at Morgan Stanley heading up a highly regarded team of economists around the world.
He had a critical take on the explosion of buying the world's most popular cryptocurrency.
"This is a dangerous speculative bubble by any shadow or stretch of the imagination," he told CNBC's "The Rundown."
"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 added.
Bitcoin has surged more than 1,000 percent this year, accelerated by rising interest from retail and institutional investors who view the digital currency as a possible future means of exchange and store of value.
Major exchanges like the CME and CBOE have also legitimized the currency's investment credentials by saying they plan to introduce futures contracts to their respective exchanges, likely further supporting the price.
Roach suggested that exchange legitimization makes bitcoin "somewhat dangerous" for investors, given what he described as a "lack of intrinsic underlying economic value to the concept."
Many investors admit to not understanding the technicalities of the instrument or the blockchain technology that underpins its existence, hoping instead to profit on the expectation that bitcoin as an investment will simply continue to rise.
"Like all bubbles, they burst," Roach said.
"They go down, and the one who's made the last investment gets hurt the most, there's no question about it."
Thank You For Reading Steemit Friends!