Bitcoin’s recent price volatility has earned it no small measure of criticism from key players in the world of high finance and government regulation. Recently, the Commonwealth of Massachusetts’ chief securities regulator William Galvin added his voice to that chorus of negative critiques during an appearance on CNBC’s Fast Money, when he suggested that Bitcoin “doesn’t pass the smell test.”
"There is no product here. This is entirely speculation. That's already been proven by the high gyrations of the value. It's also subject to manipulation, because no one can explain it no one can control it."
Keen observers will recognize Galvin’s name, as he was the securities regulator who issued an advisory warning for Massachusetts investors two weeks ago. That warning included seven reasons that Galvin felt the Bitcoin might be a “worthless product.” At that time, CBOE had just launched its Bitcoin futures, and Galvin wanted to make investors aware of the risks.
Galvin’s seven reasons for concern included the fact that Bitcoin had no official government backing, investor failure to do their homework, and a perceived lack of wallet security. Price volatility, investor speculation, the experimental nature of blockchain technology, and a lack of regulation were also identified as potential risks. In that advisory, Galvin also suggested that Bitcoin-related investment enthusiasm was nothing new:
"Bitcoin is just the latest in a history of speculative bubbles that most often burst, leaving the average investors with a worthless product. Going back to the 1600s with tulip mania to the present Bitcoin craze, chasing the next best thing will, more often than not, end in disaster for the average investor."