Bitcoin Is Asset Class for Stupid Speculators, Says David Stockman

Former businessman and politician David Stockman has opined that Bitcoin is headed for a “spectacular crash” because it does not represent money or even a real asset class.

David Stockman believes that Bitcoin is racing towards a “spectacular crash” and is nothing more than a “gimmick” fooling “stupid speculators.” The former Republican congressman, who ran the Office of Management and Budget under President Ronald Reagan, told CNBC said that Bitcoin was neither real money nor a real asset class.  

Speaking to CNBC’s “Futures Now,” Stockman commented as follows: 

“It's basically a class of really stupid speculators who have convinced themselves that trees grow to the sky. [Bitcoin] will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.”

Stockman’s apocalyptic forecasts extend to the stock market. The former businessman expects a “gigantic, horrendous storm” to hit the equity market. He told the same program in September 2017 that a correction of up to 70% might come soon. 

Stockman considers the Fed and other central banks guilty of producing the current speculative environment that has fueled both the cryptocurrency and stock markets. Central banks have been creating easy money via near-zero interest rates and quantitative easing programs. 

When asked why some highly respected companies like CBOE and CME Group are getting involved with Bitcoin if it is so risky, Stockman replied:

“Anytime Wall Street sees an opportunity to shear the sheep, and they see the sheep stampeding to the slaughter, they line up with some new gimmick to take advantage of the circumstances. That's all.”

"There is nothing that's being validated by the opening up of a futures market. It's just everybody trying to get on the train for the ride," he added.

Stockman said he could not offer a prediction, stating that Bitcoin could double or triple from here on or just drop to zero. His main concern is that Bitcoin is not real money because of its instability. 

Both futures exchanges declined to comment for CNBC. 

This is not the first time that Bitcoin traders have been dubbed “stupid.” JPMorgan CEO Jamie Dimon recently said he would kick out any trader who considers Bitcoin:

“I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both are dangerous.”