Alan Greenspan, former Fed Chairman: Bitcoin (that just reached $15,000) is not a rational currency

If one imagines himself as a traditional asset manager and investor, it would be much easier to understand the skepticism of those people. Seriously, the value of this cryptocurrency is growing so rapidly that prognoses which were previously considered too good to be true actually turn out to be too pessimistic. For example, Thomas Lee predicted Bitcoin is going to reach $11,000 in 2018 — and look what actually happened, it’s overpassing $15,000 in Coinmarketcap just as this message is being written. Ronnie Moas, who told that $20,000 is a reachable value, might be right.

No surprise that the ex-Chairman of the United States Federal Reserve says Bitcoin is not a rational currency. “But that does not mean it will not trade, because so long as people believe, they can sell it to somebody else or unload it to somebody else, that’s all you need to create a market. And look, human beings buy all sorts of things that aren’t worth anything, but they do it anyway,” says Mr. Alan Greenspan quite calmly in comparison to, say, Jamie Dimon. Giving another example of irrational trades, he tells about casinos which exist for a long time even though everybody knows odds are against the player.

The whole irrational trades message is quite realistic and it repeats one of the main postulates of the Austrian economic school which, too, says that market members are not rational beings and the sentiment changes irrationally.