Bitcoin is a bubble, no plans to short-sell: Japan Post Bank CIO

By Tomo Uetake and Hideyuki Sano

 

Japan Post Bank Chief Investment Officer Katsunori Sago speaks during an interview with Reuters in Tokyo, Japan February 16, 2017. REUTERS/Kim Kyung-Hoon/Files

 

TOKYO (Reuters) - Bitcoin is in a bubble and its fair value should be around $100, or about 99 percent below the current level, Katsunori Sago, chief investment officer of Japan Post Bank said on Thursday.

 

The bank could consider buying the digital currency if it falls to $100, but has no plans to short-sell bitcoin because it is too volatile, he added.

 

The current bitcoin craze is worse than the dot-com bubble in the late 1990s that eventually busted in 2000, Sago said.

 

"During the information technology bubble, we saw a rally in dot-com company shares. But at least at that time, there were people using Yahoo or (Japanese internet firm) Rakuten -- people were using their services," he said.

 

"But this time, I see quite a lot of people doing crypto-currency businesses in my circle of friends. But I hardly know anyone in person who is trading crypto-currencies and I haven't seen anyone using them in real life," he said.

 

"So in that sense, it's worse than the IT bubble," he added.

 

Sago also said he found it troubling when a friend who has no background in the financial industry recently asked his opinion of crypto-currencies.

 

"When people who have nothing to do with finance ask me that sort of question, normally that market will get into trouble in a few months. According to knowledge from my experience, it is a very important signal for me," noting that he had a similar experience twice, once before the dot-com bubble burst in 2000 and another in 2007, when stock prices peaked in many countries.

 

Sago said bitcoin's rally could end after its price hits the $10,000 mark or right before the CME Group launches bitcoin futures some time by the end of this year.

 

The futures contract is expected to make it possible for institutional investors to short the digital currency.

 

But Sago said it is hard to predict when and where a bubble will burst, and therefore, the bank is not interested in shorting bitcoin.

 

Sago noted that blockchain is a great technology and one day bitcoin could become a major means of settlement.

 

"But that will be years away, possibly more than a decade -- so there's no need to buy bitcoin now. Since no one knows when the bubble will burst, the best thing to do here is to stay away from it," he said.

 

($1 = 113.00 yen)

 

(Editing by Jacqueline Wong)

 

-- © Copyright Reuters 2017-11-17

Clearly the price is too high but if bitcoin is seen as a limited supply like gold, it worth more than 100$, in fact it worth what the peope are willing to pay to have some.

2 hours ago, Golgota said:

Clearly the price is too high but if bitcoin is seen as a limited supply like gold, it worth more than 100$, in fact it worth what the peope are willing to pay to have some.

Tru dat. Fair value is what the buyer perceives as fair value...until it take a dump! 

6 hours ago, Skeptic7 said:

Tru dat. Fair value is what the buyer perceives as fair value...until it take a dump! 

With billions involved in crypto and literally hundreds of coins, a purge is bound to happen soon

On 11/17/2017 at 11:50 PM, Golgota said:

With billions involved in crypto and literally hundreds of coins, a purge is bound to happen soon

but as long as there are buyers around it will not burst. Theres still so much hype about bitcoin. The national newspaper in my country reported on the front page that 1 bitcoin will be worth 1 million in 2 yrs. This sort of article leads to many dreamers to join in the action. I think 2018 will see a huge increase in prices perhaps to 50k when the futures boys join in on the action. 

35 minutes ago, ghworker2010 said:

but as long as there are buyers around it will not burst. Theres still so much hype about bitcoin. The national newspaper in my country reported on the front page that 1 bitcoin will be worth 1 million in 2 yrs. This sort of article leads to many dreamers to join in the action. I think 2018 will see a huge increase in prices perhaps to 50k when the futures boys join in on the action. 

I agree with you.. In fact as I still have some of my benefits.involved in crypto i hope it will last another 6 months :+