Secretary of State William Galvin wants Massachusetts investors to stay away from bitcoin, the popular crypto-currency that’s gaining legitimacy in some markets as it’s value soars.
Galvin is the state’s chief financial regulator and he considers bitcoin a financial bubble that would be a gamble for anyone willing to invest in it.
“It’s simply a creation of a vehicle which doesn’t exist backed by any government, there’s no entity that supports it, so if it collapses it’s gone,” Galvin told WGBH News Wednesday.
The Chicago Board Options Exchange began trading bitcoin futures this month, a development that lead Secretary of State William Galvin to put out a warning to stay away from what he sees as an investment bubble - or worse, a hotbed of online fraud.
“If you don’t understand it, don’t invest it. It’s that simple. And since most people won’t understand it, that will apply to most people. It’s just not a good idea,” Galvin said.
Before spending money on bitcoin, Galvin wants investors in Massachusetts to check with the Secretary of State’s office to see if the broker is licensed or registered with the state.
Galvin compared the bitcoin craze to other financial bubbles, like the dot-com boom, subprime home loans and Dutch tulip mania in the 1630s.
