International investor Jim Rogers predicts that not only is digital currency bitcoin a bubble straining to pop, but soaring U.S. stocks will continue to surge to new highs before tumbling back to earth a year from now.
“I don’t own any bitcoin, I’ve never bought or sold so I am not a good one to ask, but it sure looks like a picture of a bubble,” Rogers told FOX Business Network’s Varney & Co.
“If you just showed me charts, and showed me what has happened in that market for the past year or two, and didn’t tell me what it was, I’d say, Stuart, this looks like every bubble I’ve read about,” the Rogers Holding Chairman said.
Meanwhile, bitcoin’s vertiginous ascent showed no signs of abating on Monday, with the cryptocurrency soaring to another record high just a few percent away from $10,000 after gaining more than a fifth in value over the past three days alone.
The digital currency has seen an eye-watering tenfold increase in its value since the start of the year and has more than doubled in value since the beginning of October, lifted by the prospect of crossing over into the financial mainstream, amid a flurry of crypto-hedge fund launches, Reuters reported.
It surged as much as 4.5 percent on Monday to trade at $9,721 on the Luxembourg-based Bitstamp exchange, before easing back to around $9,600 by 1155 GMT.
Data compiled by Alistair Milne, the Monaco-based manager of the Altana Digital Currency Fund, showed U.S. bitcoin wallet provider Coinbase added 300,000 users between Wednesday and Sunday, during the U.S. Thanksgiving holiday. The total number of Coinbase users globally now stands at 13.3 million.
“The Coinbase data is evidence that adoption is not slowing down,” Milne told Reuters. “Breaking $10,000 seems inevitable following the recent price action.”
Bitcoin’s price has been helped in recent months by the announcement that the world’s biggest derivatives exchange operator CME Group would start offering bitcoin futures. The company said last week the futures would launch by the end of the year though no precise date had been set.
At the same the digital currency hit new records, the U.S. stock market also touched new highs.
The main indexes touched record intra-day highs earlier after retailers, including Amazon.com, rose on an expected surge in online sales on Cyber Monday, adding to strong sales on Black Friday.
Adobe Analytics said Cyber Monday is expected to drive $6.6 billion in internet sales this year, which would make it the largest U.S. online shopping day in history, Reuters reported.
“Investors are looking at retail stocks as Black Friday and Cyber Monday have been a good start to the holiday season, and much stronger data on new home sales has lifted the market higher,” said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh.
For his part, Rogers expected the market to continue to climb in the short term before eventually coming back down to earth.
“Oh I suspect we will hit more new highs, which will surprise everybody, including me, but next year at this time, stocks will be down,” said Rogers, who co-founded the Quantum Fund with George Soros in 1973.
As for the future, Rogers advised caution on buying stocks if the Trump tax reform deal passes.
“Well, it looks like there’s a blowout in place, and you know, it often happens in markets every 10, 20, 30 years we have them. We may be having one now, but Stuart, I would buy Japan if this happens. Japanese markets are down 50 percent from their all-time high. Chinese stocks are down 40 percent. I’d rather buy low instead of buying high.”
(Newsmax wires services contributed to this report).