First it was the stock market. Now, it's bitcoin.
David Stockman, President Ronald Reagan's former director of the Office of Management and a relentless Wall Street bear, is warning investors that the cryptocurrency boom will end disastrously.
"It's basically a class of really stupid speculators who have convinced themselves that trees grow to the sky," he told CNBC's "Futures Now" last week. "It 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 latest prophecy isn't exclusive to botcoin.
In September ,40 to 70 percent correction wasn't too far down the road. On Friday, the Dow Jones Industrial Average flirted with 25,000, with the S&P
Stockman blamed the Federal Reserve and central banks for creating the hype surrounding the stock and cryptocurrency markets. He argued that too much liquidity was pumped into the marketplace to deal with the 2008 global financial crisis — noting that not even regulators can improve the frothy situation.
"What we really need to do is not think these are regulator problems, but understand they're monetary problems," he said. "It's an irrational, overheated market like never before."
In the past two years, bitcoin prices have soared by more than 3,000 percent. Its wild price swings have sparked debates on Wall Street over how much it's really worth. Bitcoin's less expensive peers such as litecoin and ether have also surged.
