Former Federal Reserve Chairman Alan Greenspan said Bitcoin is a bubble after it surged 89-fold in a year and that the virtual money isn’t currency.

“It’s a bubble,” Greenspan, 87, said in a Bloomberg Television interview from Washington. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.”

Alan Greenspan, former chairman of the US Federal Reserve. Credit:KEVIN LAMARQUE, REUTERS

Bitcoins, which exist as software and aren’t regulated by any country or banking authority, surged to a record $US1,124.76 on November 30.

The currency has rallied on growing interest from investors, while merchants are starting to accept Bitcoins. US officials have also said such payments could be a legitimate means of exchange.