Nobel Prize-winning economist Robert Shiller believes there’s no clear way to put a price on bitcoin.
“I think the value of bitcoin is exceptionally ambiguous,” he told CNBC today.
The comment is perhaps notable in that it comes from a legendary economist who gained long-term credibility following his work around the 1987 stock market crash and the housing bubble in 2008. He received the Nobel Prize in Economics in October 2013.
Yet speaking to the network, Shiller argued that it’s difficult to peg the fundamental price of bitcoin, remarking:
“You just put an upper bound on [bitcoin] with the value of the world’s money supply. But that upper bound is awfully big. So it can be anywhere between zero and there.”
That same sentiment was reflected in Shiller’s recent op-ed article for The New York Times, in which he wrote: “How can we even start estimating the fundamental value of bitcoin, with its astonishing market value of more than $275 billion? Any attempt will soon sound silly.”
Bitcoin’s price has surged in value since the beginning the year, climbing from $800 last January to a new record of almost $20,000 this weekend, according to CoinDesk’s Bitcoin Price Index.
Shiller cited a phenomenon that may explain the reasons behind such a phenomenal market rally. According to neuroscientists, he said, our brains work differently when making choices in a stressful, ambiguous environment.
“You might think people who are educated will transform the decision problem into something precise … But it doesn’t seem like the brain is doing that,” Shiller told CNBC.
Robert Shiller image via WEF/Wikipedia