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Bitcoin labeled 'a bubble.'

Bitcoin met with harsh critics at the World Economic Forum in Davos, Switzerland. Image:  modified from TheBitMom

As the World Economic Forum (WEF) gathers in Davos, Switzerland this week, Bitcoin appears to be merely a blip on the radar for the international political and financial elite.  Even so, comments from leaders in these fields have been less than enthusiastic

Perhaps the most attention garnering sentiments have come from Robert Shiller, Nobel laureate and Yale Professor of Economics.  An expert in the nature of market excesses, Shiller is quoted as saying “It is a bubble, there is no question about… It’s just an amazing example of a bubble.”

While Shiller himself suggests that Bitcoin is a return to the dark ages of currency due to the lack of clarity surrounding its use and regulation, he acknowledges that he understands how others may find the computer science behind the virtual currency “inspirational.”  Shiller also concedes that the jump in value over the past year is “logical” because it follows human interest in high votility markets.

Treasure Secretary Jack Lew and JP Morgan Chairman and CEO Jamie Dimon had similar attitudes regarding the digital currency.  Both admitted to sharing an “incredulity” about Bitcoin, with Dimon calling it a “terrible store of value.”

“The question isn’t whether we accept it,” Dimon told CNBC, “[t]he question is do we even participate [with] people who facilitate bitcoin?”  Once Bitcoin is made to follow the same standards as other payment systems, that will “probably be the end of them,” he concluded.

Lew added to this his concerns about a virtual currency’s potential to be misused by criminals or for terrorist activities, saying the anonymity of Bitcoin “offers places for people to hide.”

Lew has made it clear that the government will look at Bitcoin and similar transactions and will “enforce all the rules on illegal money activity.”

The World Economic Forum is held annually in Davos-Klosters, Switzerland, and wraps up tomorrow with the Global Economic Outlook for 2014, followed by a multimedia performance titled, quite fittingly, “A Leap of Faith.”

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