US economist warns of Bitcoin mania doubting its real social value

DUBAI — Renowned US economist Joseph E. Stiglitz said here Tuesday that he believes the crypto currency Bitcoin "has no social value" and that he would be surprised if the rally would continue in 2018.

He made the remarks at the one-day annual Arab Strategy Forum held in Dubai in its 10th edition.

"The US government can shut down Bitcoin at any time if it wants to do so," said Stiglitz, who received the Nobel Memorial Prize in Economic Sciences for his research on market information in 2001.

Bitcoin rose to $19,000 per unit in value on Thursday from $3,000 per unit in August.

On Sunday, the Chicago Board Options Exchange launched Bitcoin futures as the first regulated US exchange, pushing the price of the crypto currency higher by around 26 percent that day.

"I think the dollar is still the currency of choice because you can buy goods around the world, while the greenback also has not lost its power as medium of exchange, which the Bitcoin allegedly offers as a crypto currency free of central bank regulation," Stiglitz said.

The US economist also compared the passion for Bitcoin to the tulip mania in the Netherlands in the 17th century.

The tulip mania, also called the mother of all speculations, lifted the price of a flower unit to the value of a villa in Amsterdam within a few years before prices collapsed in May 1637, dragging thousands of tulip buyers into bankruptcy.