David Stockman, former director of President Ronald Reagan's executive office, told CNBC's Futures Now that investors on the cryptocurrency market are stupid speculators "

Stockman said:

" It's basically a class of really stupid speculators who have convinced themselves that the trees grow upward, in a spectacular accident all these speculators of the last days will have their hands burned and will learn the right lesson. "

Weak Argument

In recent years month, Stockman also expressed its bearish stance on the global stock market and predicted a "gigantic and appalling storm" to hit stocks. Stockman literally predicted that every asset and cryptocurrency on the world market would lose value for an indefinite period, making its prediction and argument very weak.

Economists like Stockman and Paul Krugman have consistently failed to provide compelling arguments why Stockman and Krugman have stated that Bitcoin is a bubble and that crypto-currencies have no underlying value or intrinsic value.

However, investment in cryptocurrencies and cryptographic assets such as Bitcoin and Ethereum is "stupid". As Mark Cuban, a billionaire investor, explained, the lack of intrinsic value is true for any asset and currency in the market. Even fiduciary currencies that are fully government-controlled in terms of supply and circulation do not have intrinsic value either, as their valuation depends on the market and investor demand. If companies, individuals and investors decide not to use the US dollar, its value will inevitably fall.

At the New Establishment Summit 2017 of Vanity Fair, Cuba noted:

"It is interesting because there are many assets whose value is simply based on supply and demand.Most shares there is no intrinsic value because you have no real property right and no voting rights. just the ability to buy and sell these shares.Bitcoin is the same thing.Its value is based on the offer request.I bought it via an ETN based on a swedish exchange. "

It is relatively easy to condemn an ​​asset class or a particular stock with basic arguments such as lack of intrinsic value and speculation in the marketplace. But, it is difficult to provide specific reasons why assets are overvalued and are caught in bubbles in the short term.

Moreover, it is not possible to generalize investors in the cryptocurrency market as speculators. Many investors in the cryptocurrency market could understand the technology behind the decentralized currencies like Bitcoin and their potential to challenge multi-trillion markets like the offshore and gold banking markets, which is enough to justify their investment in the sector. are not bubbles

Although it is possible that bitcoin and cryptocurrencies experience short-term bubbles, cryptocurrencies in general are not bubbles. The cryptocurrency market is one of the world's liquid markets and Bitcoin, the market's most valuable cryptocurrency, is already more liquid than Apple's most liquid stock, with a volume of transactions daily $ 12 billion.

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This pattern is repeated until & # 39; to Bitcoin $ 100,000 more … pic.twitter.com/o9Wj4reBtv – Max Keizer (@maxkeiser) June 2, 2017

Stockman also claimed that cryptocurrencies are not real money because transactions are not stable. Transactions on the main public blockchains like Bitcoin, Ethereum and Litecoin are processed on a stable network with a well-structured pricing system and a consensus protocol algorithm

"I have no idea, I mean it could double or triple or it could fall to zero. But the fact is that it is not real money because the real money for the transactions has to be stable ", added Stockman.