Investors in bitcoin and other cryptocurrencies went through spasms again this week, before the US Senate Committee on Banking heard out the chiefs of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
As is wont, bitcoin tumbled 23 percent, its price handle going below $5,000. That price range compared with $10,000 at the start of the month. Incidentally, the cryptocurrency crash coincided with the US stock markets crash that saw Dow Jones losing more than 1,000 points.
And, then in a matter of hours cryptocurrencies staged another spectacular recovery. Bitcoin now trades near $8,000.
Overall in the last five years, bitcoin registered a growth of over 4,000 percent. In the last year alone, bitcoin rose 1,300 percent, ethereum 8,000 percent and ripple about 32,000 percent.
Despite risks, extreme volatility and uncertainties, bitcoin believers are downright bullish. Some say bitcoin will rise to $50,000 this year.
The latest survey conducted by digital currency news site Coindesk revealed that the craze over cryptocurrencies is such that some 20 percent of investors indebted themselves to increase their bitcoin investment.
At the other end of the spectrum, a whole lot of investment luminaries and financial experts have called cryptocurrencies a bubble, a mirage and a scam that's waiting to go belly up. Here's a look at what the prominent cryptocurrency naysayers believe:
Roubini, who earned trhe moniker Dr. Doom after he predicted the US housing bubble crash of 2007, says bitcoin is the 'mother of all bubbles' and that its fundamental value is zero. Bitcoin is "the mother of all bubbles and is also the biggest bubble in human history if you compare it to, say, the Mississippi bubble or the tech bubble or tulip mania or South Sea Bubble ... Now it has crashed by about 60 percent compared to the peak of mid-December. It has crashed 30 percent in the last week and 10 percent today, and ... the fundamental value of Bitcoin is zero."
The Wall Street legend says bitcoin and other cryptocurrencies are 'ridiculous', raising questions about the regulatory hassles. ''I don't like the cryptocurrencies only because, maybe I don't understand them...," he told CNBC. "Maybe I'm too old for them," Icahn said, "but I wouldn't touch that stuff."
Buffett, who said in 2014 bitcoin was merely a "mirage" hasn't changed his view four years later. "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending... When it happens or how or anything else, I don't know. But I know this: if I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it but I would never short a dime's worth," he told CNBC in an interview.
He explained the plane logic behind the lack of intrinsic value for cryptocurrency this way:
"It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view."
The billionaire investor compares cryptocurrencies with the Tulip mania of 1637 and the internet bubble of 1999. "In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it," he wrote in letter to investors.
Dimon, the chairman and CEO of JPMorgan Chase, says bitcoin isn't going to work. "You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart." According to him the bubble will burst eventually. "Don't ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up... Honestly, I am just shocked that anyone can't see it for what it is," he told Reuters.
The former governor of the US Federal Reserve says the main problem with bitcoin is the lack of any stable source of value. "I think bitcoin itself has some serious problems. The first is that it hasn't shown to be a stable source of value. Its price has been highly volatile and it hasn't yet established itself as a widely accepted transactions medium."
He says bitcoin's anonymity itself will lead to its doom. "...Governments are not happy to let that activity happen, so I suspect that there will be oversight of transactions done in bitcoin or similar currencies and that will reduce the appeal," he told the Quartz.
The multi-billionaire investor and philanthropist says it's a misnomer to call bitcoin a currency. "Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding ... Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can't be used for instance to pay wages because wages drop by 25% in a day. It's a speculation. Based on a misunderstanding," he said at the World Economic Forum in Davos.
Phenomenally successful Indian investor Jhunjhunwala also debunks cryptocurrencies. "This is a new tulip. It will be 200 years later as the madness of this century," he said, In a separate tweet he added: "Why are investors crazy for #Bitcoin ? What's the base behind it's growth and slump? Is it a virtual scam in bull phase to fizzle out soon?
Munger, the friend and associate of Buffet, trashes bitcoins outright, saying it's total insanity. "I think it is perfectly asinine to even pause to think about them ... It's bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work. That's the last thing on Earth you should think about ... There's just a whole lot of things that aren't going to work for you. Figure out what they are and avoid them like the plague. And one of them is bitcoin. ... It is total insanity."
"You know it is one thing to think gold has some marvelous store of value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more bitcoin. ... They tell you there are rules and they can't do it. Don't believe them. When there is enough incentive, bad things will happen."
Nobel-winning economist Stiglitz also predicts an imminent bitcoin collapse: "Bitcoin is successful only because of its potential for circumvention, lack of oversight, so it seems to me it ought to be outlawed. It doesn't serve any socially useful function," he said at the World Economic Forum.
"It's a bubble that's going to give a lot of people a lot of exciting times as it rides up and then goes down... The value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow... If the government says 'the reason bitcoin is being used is circumvention,' they could close it down at any moment. And then it collapses."
Prince Alwaleed bin Talal
The iconic Saudi Arabian investor calls bitcoin 'Enron in the making.' "II just don't believe in this bitcoin thing. I think it's going to implode one day. It's Enron in the making... This thing does not make sense. It's unregulated. It's not under the control of the U.S. Federal Reserve or any other central bank," he told Reuters.