Bitcoin has more than halved in value this year, leading critics to say it's in a bubble that's deflating.

Jon Matonis, the cofounder of the Bitcoin Foundation, says the real bubble is in bond and stock markets.

Matonis thinks that we're entering a "post-legal-tender age" and that it's great that big banks are getting interested in crypto.

LONDON — A senior bitcoin advocate has dismissed fears that the market is in a bubble, saying instead that bond and stock markets around the world are being artificially inflated by central banks.

Bitcoin surged to over $20,000 a coin in the final months of 2017 but has since collapsed to about $7,000, leading skeptics to argue that that cryptocurrency was in a bubble that is now bursting.

Jon Matonis, who helped found the Bitcoin Foundation in 2012, told Business Insider: "To the people who say bitcoin's a bubble, I would say bitcoin is the pin that's going to pop the bubble. The bubble is the insane bond markets and the fake equity markets that are propped up by the central banks. Those are the bubbles."

Matonis, who spoke with Business Insider at the Innovate Finance conference in London earlier this month, believes we are entering a "post-legal-tender age," which he says "isn't driven by central banks." Decentralized cryptocurrencies like bitcoin will power this shift, he said.

"Hard-coded into the original block zero, genesis block, of bitcoin was a headline from The Times of London saying, ‘Chancellor on the brink of second bailout for banks,'" Matonis said. "All they're doing is papering over the bulls--- infrastructure. That headline epitomizes what bitcoin is about — that's why it was hard-coded in there."

Matonis was a currency trader for the Japanese bank Sumitomo and for Visa before he helped set up the Bitcoin Foundation in 2012. The nonprofit was created to help compensate the core developers of the bitcoin protocol. Matonis sat on the foundation's board from 2012 to 2014 and remains an executive director.

'The regulators are so confused'

Despite his skepticism about the existing financial system, Matonis thinks it's "wonderful" that big banks such as Goldman Sachs are considering entering the world of crypto.

Bitcoin Foundation's Jon Matonis. YouTube/Screenshot "I think it's fabulous that they're getting into it because it brings in new liquidity," he said, adding that the institutions would help "mature the market" and reduce volatility.

"They're going to develop futures markets, options markets — I even think you're going to start to see interest-rate markets around bitcoin," he said. "We're used to hearing things about Libor, the index for bitcoin interest rates is Bibor."

Regulators around the world have been trying to come to grips with crypto, and the UK recently set up a crypto "task force" to consider regulation of the space.

Matonis doesn't think crypto should be regulated.

"I think we should operate in an environment of caveat emptor: Let the buyer do his research," he said. "This hopefully has forced a lot of investors to do more research. No one is forcing them to invest in ICOs," or initial coin offerings. "If you're worried about the risk, just walk away."

He added: "The regulators are so confused, not just in Europe but in North America as well. They're used to fundraising models that involve selling debt or selling equity."

Matonis characterized bitcoin as a "third model for a startup to raise funds."

"They actually issue utility tokens into the market that don't represent equity, they don't represent equity, they don't represent debt," he said. "They represent a negotiable claim on the success of the token, which is in effect, hopefully, linked to the success of the company.

"This is an entirely new model, and it doesn't fit in any of the regulator's boxes."