Newsmax's Sean Hyman: Bitcoin Is 'A Bubble That's About to Pop'

Friday, 06 Dec 2013 12:56 PM

By Dan Weil

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Sean Hyman, editor of Newsmax's Ultimate Wealth Report newsletter and a Moneynews.com contributor, isn't a believer in the digital bitcoin currency.

"I think it's a bubble that's about to pop. It's going to be ugly," he told Fox Business Network. "I know it's going to crash. They [bubbles] crash hard and leave a lot of hurt people along the way."

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The bitcoin, which exists as software and isn’t regulated by any country or banking authority, traded at $925 Friday, down 12 percent from Thursday, after breaching $1,200 last week. The currency has suffered from China's decision Thursday to forbid its banks from trading bitcoins.

Editor’s Note: See Sean Hyman Explain His Biblical Money Code for Investing

Governments are worried about the fact that they can't regulate the currency's use, Hyman says.

"A whole lot of money laundering can happen through it, and that's governments' biggest fear," he said. "They would lose a ton of tax dollars if they allowed that to become too widespread."

The Federal Reserve certainly isn't looking for a competitor to the dollar, Hyman says. "The dollar has enough trouble on its own," he said.

"I wouldn't get it [the dollar] as an investment. But at least with dollars, you can go in a grocery store and buy milk and eggs. Try doing that with bitcoin."

Banks aren't enthusiastic over the bitcoin either, experts say. These institutions too are worried about the illicit activity that can be carried out in bitcoins.

"Banks are scared to deal with bitcoin companies, even if they really want to,” Stephen Pair, chief technical officer of BitPay, which processes bitcoin payments, told Bloomberg.

Former Federal Reserve Chairman Alan Greenspan also isn't a fan of bitcoins.

“It’s a bubble,” Greenspan told Bloomberg Television. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can,” he said.

“I do not understand where the backing of bitcoin is coming from,” he said. “There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it’s a government or an individual.”

Editor’s Note: See Sean Hyman Explain His Biblical Money Code for Investing

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