Speaking to CNBC’s Leslie Picker earlier this week, Citadel hedge fund founder and CEO Ken Griffin echoed the sentiments of JPMorgan CEO Jamie Dimon, likening Bitcoin to the historical ‘Dutch tulip bulb mania’ in the 1600s.
Griffin’s main concern is that people enticed by the hype of the Bitcoin bull run don’t have an understanding of the intrinsic value of the Blockchain technology it is based on.
“Blockchain’s a very interesting technology that will have some very profound applications for society over the years to come.”
With the $11,000 milestone newly etched onto its belt, Bitcoin continues its rise in value while a chorus of voices sings contrasting melodies. For some, the Bitcoin price surge over the past two weeks has been nothing short of miraculous, vindicating “outlandish” predictions made months ago. The more-wary pundits are staying at an arm’s length, watching nervously as what they describe as a bubble continues to grow.
The billionaire is concerned that the average person on the street is simply trying to ride the wave, without understanding the applications of Blockchain technology. He suggests that the hype could end badly for some:
“I get very worried that people that are buying Bitcoins don’t really understand what they’re participating in other than the headline stories that it keeps going higher and I want to make sure I don’t miss this opportunity to make some money.”
“So is it a fraud? No. But these bubbles tend to end in tears. And I worry about how this bubble might end.”
When does the run end
There is no telling if and when Bitcoin’s rise in value will come to an end. The likes American broadcaster Max Keiser have suggested a $100,000 high in the coming years, while slightly more conservative estimates of a $40,000 high from fund manager Mike Novogratz still boggle the mind.
Conventional markets, in their simplest form, are dictated by supply and demand. While Bitcoin’s cap is 21 mln, analysts predict that its downfall could be further forks in the Blockchain in the future.
However, as the suspended SegWit2x fork proved, the community of developers, miners and traders have to reach a consensus before hard, telling changes are made to the Blockchain.