With the huge debate going on regarding bitcoin’s sustainability, the former Federal Reserve, Chairman A. Greenspan, expressed his views. According to Greenspan, the digital currency can be compared to the 18th century’s Continental Currency, which was also not backed by anything.
“Human nature is such that if you get something such as bitcoin, you think there is some value there whether there is or there isn’t. But that’s the same thing as a Continental, greenbacks in the Civil War, all of these currencies which didn’t have any backing”, says Alan Greenspan.
This is not the first time that Greenspan has commented on digital currency. When Bitcoin hit $1,000 back in 2013, he stated he did not see bitcoin as a currency. He went on to explain that bitcoin has no value and will eventually face demise.
“It [bitcoin] 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,” - Greenspan in 2013.
On the other hand, US Trading Commissioner and Former US Regulator, Bart Chilton, disagrees with Greenspan. Chilton has been an enthusiast of the digital currency and holds firm belief in bitcoin’s sustainability. He believes that upcoming events, like CME's future market, will help to improve the regulatory environment around cryptocurrencies. This will eventually build trust in cryptocurrency markets.
Chilton was quoted in response to Greenspan’s comments, saying:
“I do think it’s sustainable, I don’t know if it’s sustainable at these prices — I mean, the only difference is, with Chairman Greenspan is that, you know, people are willing to pay for it and so if they’re willing to pay for it there is a demand.”
He believes that bitcoin is viable as long as its volatility can be controlled. The prices of bitcoin have been on a roller-coaster lately, starting from $200 to topping at $5,000. Chilton strongly believes that if this loop hole of digital currency could be fixed, it will turn out to be a great success revolutionizing the way trade and commerce works.
Chilton recently wrote a guest post on CNBC, where he explained that he sees the reason behind the volatility of bitcoin to be two-fold. One, bitcoin is not like a stock as it is not backed by anything and its value is solely determined by how much people are willing to pay for it. Secondly, the regulatory environment surrounding bitcoin is totally unregulated, which can be a bit of problem as governments will eventually crackdown on it.