Bitcoin is a 'dangerous speculative bubble', top economist warns

Morgan Stanley's former chief economist warns bitcoin is 'toxic' for investors

Bitcoin has been slammed as a “dangerous speculative bubble” by a top economist as speculation continues to fuel the rise of the cryptocurrency’s value.

Stephen Roach, former chief economist at Morgan Stanley and Yale University fellow, warned bitcoin was a “toxic concept for investors”.

“I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career,” he told CNBC.

Critics of bitcoin have most notably come from traditional banks. JPMorgan chief executive Jamie Dimon has described investors of bitcoin as “stupid” and said he would fire staff caught trading in it.

Bitcoin has surged more than 1,000 per cent this year, raising concerns about an impending crash. Its value is $11,699 (£8,716) as of Tuesday morning, according to Coinbase.

The UK Government said on Monday that it hopes to step up regulation of bitcoin amid concerns about on criminals using the cryptocurrency for money laundering and illegal activity.

The Treasury wants to extend EU-wide rules on forcing traders to disclose their identities and report any suspicious activity.