Robert Schiller, Nobel Prize winner in Economics (2013) and Professor of Economics at Yale University, is known worldwide as the author of the book “Irrational Exuberance”, on the nature of the so-called “bubbles”. As the economist thinks, today Bitcoin is probably the best example of a bubble. He expressed his opinion in an interview with the Quartz publication.
“The best modern example is Bitcoin. And I think this is due to the motivational side of Bitcoin. I saw this in my students at Yale. You start talking about Bitcoin, and they get excited. I’m starting to wonder: what’s the reason for the excitement?” – Robert Schiller said.
According to him, in order to understand the nature of Bitcoin, it is first of all necessary to turn to the figure of Satoshi Nakamoto, the mysterious creator of cryptocurrency.
“He was never found. This is a wonderful mystery. And he has this very clever idea of encryption, blockchain, and open registries, which turns out to be so powerful that even governments can not stop it. It is impossible to regulate, because this idea fits perfectly into the fears inherent in this time in history”.
Explaining his last words, Robert Shiller refers to the third edition of “Irrational Optimism,” in which he argues that humanity has a fundamental deep fear of digitalization and computerization. People, he believes, can not help thinking: what is their place in this new world? What will happen in 10, 20, or 30 years? Will they have a job, will they have anything at all?
“Somehow, Bitcoin fits into all this and gives a sense of providing opportunities and creating conditions for full participation in society: “I understand what is happening! With this understanding, I can speculate and I can get rich!” – Robert Schiller believes.
He believes that this approach is seen by people as a response to all these fundamental fears.
At the same time, Robert Schiller was not sure whether Bitcoin is the biggest bubble in history.
“I do not know how to measure this quantitatively. But I see that something excites you. More people are excited by Donald Trump, you probably heard about this guy. It’s just amazing how he can dominate. I think he is a genius who knows how to hear the audience and understands what motivates it”.
According to Schiller, Donald Trump is also exactly related to this fundamental fear that is embedded in people in this increasingly digital society. And he could respond to this fear by suggesting a story in which an ordinary person, a voter, participates and achieves success.
Recalling that the well-known financial analyst and founder of the investment firm Standpoint Research, Ronnie Moas, recently suggested that the cryptocurrency is a viable class of assets, as their total capitalization in 10 years can reach $2 trillion.