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Greenspan Likens 'Irrational' Bitcoin to Revolutionary War Currency

The former chairman of the U.S. Federal Reserve, Alan Greenspan, has joined the many financial luminaries to recently criticize bitcoin's value.

By Sujha Sundararajan
AccessTimeIconDec 7, 2017 at 11:10 a.m. UTC
Updated Sep 14, 2021 at 1:55 p.m. UTC
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The former chairman of the U.S. Federal Reserve, Alan Greenspan, has joined the many financial luminaries to recently criticize bitcoin's value.

Speaking to CNBC, Greenspan compared bitcoin to that of an early American form of money called "Continental currency" that came into use in 1775 and had become worthless by 1782. The paper-based legal tender was used at the time of the American Revolution and was not backed by a commodity such as gold.

Noting that bitcoin will likely suffer similar fate, Greenspan said that a "significant share" of  Continental currency was still used to create "real goods and services," even though it had no ultimate worth.

He continued:

"Bitcoin is really a fascinating example of how human beings create value, and is not always rational ... It is not a rational currency in that case."

Greenspan's comments come as the value of a bitcoin is soaring beyond most expectations, having gained thousands of dollars in value in the last two days. At press time, a bitcoin is worth over $15,000, according to the CoinDesk Bitcoin Price Index.

The meteoric gains have prompted many figures in the financial industry to speak out, calling the bitcoin market a bubble. JPMorgan CEO Jamie Dimon even went so far as to call the largest cryptocurrency by total market value a "fraud."

Alan Greenspan image via Shutterstock

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