Bitcoin just like the stock market is set to experience a spectacular crash according to David Stockman, President Ronald Reagan’s former director of the Office of Management. He warned investors that the cryptocurrency boom will end disastrously. According to him “It’s basically a class of really stupid speculators who have convinced themselves that trees grow to the sky,” he told CNBC’s “Futures Now” last week. “It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.”
Mr Stockman was asked why so many big trade operators are willing to bid on bitcoin despite the bad reputation the cryptocurrency continues to carry. He replied: “Anytime Wall Street sees an opportunity to sheer the sheep and when they see the sheep stampeding to the feeder they line up to take advantage of the circumstances.
The volatility of the bitcoin is worse than the stock market but this has not deterred many from putting in their money. The inclusion of bitcoin on futures exchanges heightens the risks in the cryptocurrency market. Bitcoin has experienced a number of problems as it has grown in popularity with users reporting slow transactions taking more than an hour to process. The strain on the network has also pushed up transaction processing costs. A crash in bitcoin prices could spill over into the broader stock market.
Many Bitcoin fans believe it will become a true global currency, one that you could spend on food or clothings the same way you’d use Visa or MasterCard today. Few people envision that happening soon, but if and when it did, it might be the end of Bitcoin’s huge price surge; for the digital coin to be useful as a currency, its value would have to stabilize.