Bitcoin’s recent upsurge from around $3,800 in March to $28,000 this month did not sit well with many, including economist Nouriel Roubini, who said the rally is driven by “manipulation” and will go bust anytime soon.

The NYU Stern School of Business economics professor argued that labeling Bitcoin as a currency is not accurate.

“First of all, calling it a currency — it’s not a currency. It’s not a unit of account, it’s not a means of payment,” Roubini told Yahoo Finance, adding, “It’s not a stable store of value. Secondly, it’s not even an asset.”

Despite the increase in Bitcoin’s price, the professor said it is being manipulated by several insiders, including whales and criminals.

“It doesn’t have any fundamental value,” he said of Bitcoin. “We’re close to the point where the hyperbolic bubble is going to go bust.”

Bitcoin has made steady gains in the last six months of 2020, from $10,000 in June to $28,000 by Saturday. The dominant cryptocurrency is currently up 130% in the last six months, 278% since the year began and 295% in the last 365 days.

While Roubini said Bitcoin has no place in retail or institutional investors' portfolios, the reality is that the 2020 bull run is driven by institutions.

Legendary hedge fund manager Paul Tudor Jones said in May that he has allocated 1% of his fund into Bitcoin, calling it the fastest horse, while 139-year old MassMutual has put $100 million into the crypto. Guggenheim Investments has put 10% of its $5 billion dollars into the dominant cryptocurrency. 

Public companies like MicroStrategy and Square have also made Bitcoin part of their reserves.

Still, Roubini said that because Bitcoin has actually no use or utility, it’s currently in a speculative, self-fulfilling rise driven by manipulation. He noted that Tether (USDT) is being used to manipulate Bitcoin. He cited academic research stating that there’s a massive printing of USDT every time the price of Bitcoin weakens. 

The bust will happen eventually once the government begins cracking down on the company that issues Tether, Roubini said. 

Roubini previously said on Twitter that investing in Bitcoin is like taking a portfolio to a rigged illegal casino. “At least in legit Las Vegas casinos, odds aren’t stacked against you,” he remarked.

Gold-colored Bitcoin coin on groundPhoto: André François McKenzie on Unsplash