‘Bitcoin may be with us for a while’: Nobel winning economist Shiller corrects his stand

Robert Shiller, one of three American scientists who won the 2013 economics Nobel prize, attends a press conference in New Haven, Connecticut October 14, 2013. Shiller, along with Eugene Fama and Lars Peter Hansen, won the 2013 economics Nobel prize on Monday for research that has improved the forecasting of asset prices in the long term and helped the emergence of index funds in stock markets, the award-giving body said. REUTERS/Michelle McLoughlin (UNITED STATES - Tags: BUSINESS SOCIETY SCIENCE TECHNOLOGY) - GM1E9AF05XZ01

Nobel Prize winner economist Robert Shiller, who, in the past, has regarded bitcoin as a representative of whole cryptocurrency market as a bubble, seems to be going through a change of heart.

Talking to CNBC, the economist who correctly predicted the housing crisis in the US suggested that cryptocurrency was more a psychological experiment than an instrument of serious investment.

"I'm interested in bitcoin as a sort of bubble. It doesn't mean that it will disappear, that it'll burst forever. It may be with us for a while," Shiller, professor of economics at Yale University, said on Thursday.

"To me, it's interesting as another example of faddish human behaviour. It's glamorous," he added.

Earlier, Shiller had completely denounced the cryptocurrency market and said that bitcoin was the best example of bubble happening currently.

“The best example right now is bitcoin. And I think that has to do with the motivating quality of the bitcoin story. And I’ve seen it in my students at Yale. You start talking about bitcoin and they’re excited! And I think, what’s so exciting? You have to think like humanities people. What is this bitcoin story?” he had said in September last year.

The writer of best-selling book Irrational Exuberance on market manias around the world then had said that bitcoin bubble will burst very much like the Tulip mania of the 17^th century.

Tulip mania was the first recorded speculative bubble of the world when rates of Tulip bulbs in the Netherlands had climbed to astronomical heights only to collapse in a couple of months.

In last five days, the price of bitcoin has surged by over $1,000. At the time of writing this piece, it was trading at $8,018.45 with market cap standing at over $136 billion.