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Nobel Prize Winner Stiglitz Says Bitcoin is 'Bubble,' 'Ought to be Outlawed'

CC BY-SA 2.0 / World Economic Forum / Joseph StiglitzJoseph Stiglitz at World Economic Forum Annual Meeting in Davos. (File)
Joseph Stiglitz at World Economic Forum Annual Meeting in Davos. (File) - Sputnik International
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As the value of Bitcoin drops by $2000 in a matter of hours, several leading voices in economics and finance have expressed skepticism about the cryptocurrency; Joseph Stiglitz says Bitcoin is a fad which "doesn't serve any socially useful function," while the CEO of Erste Bank thinks central banks could intervene.

The wildly popular yet volatile Bitcoin cryptocurrency, which has enjoyed a meteoric rise in recent weeks, "should be banned," according to the former chief economist of the World Bank Joseph Stiglitz.

"Bitcoin is successful only because of its potential for circumvention, lack of oversight," Stigliz, currently a professor at Columbia University, told a Bloomberg Television interview on Wednesday.

​"So it seems to me it ought to be outlawed," he said, adding that "It doesn’t serve any socially useful function."

"It's a bubble that's going to give a lot of people a lot of exciting times as it rides up and then goes down," he predicted.

​The rise of Bitcoin has indeed excited observers in recent weeks. The value of the cryptocurrency rose almost twofold, from $5,857 on November 12 to an all-time high of $11,155 on November 29. At 14:00 UTC on November 30 the cryptocurrency was trading at $9,239, a decrease of 17% in just 24 hours, according to data from Coindesk.

Stiglitz is not the only high-profile Bitcoin sceptic. On Thursday, Andreas Treichl, chairman and chief executive officer at Austria's Erste Group Bank, replied, "No I'm not," when asked if he was a "Bitcoin believer."

"I believe that if it gets stronger, it will be taken over by the central banks," he told Bloomberg.

"In a way it's fascinating, but it will make central banks lose control, and they're not going to do that. So, at some point, maybe at 20,000, 25,000, 35,000 [dollars], somebody will say 'stop,'" Treichl said.

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