Bitcoin is clearly a bubble That is why gold has been so much in demand during the financial crisis - and popular with shrewd sceptics in the years before. The clarion call of those "gold bugs," shrill in normal times, sounds more reasonable in the "new normal" - the age of unrestrained money printing and financial repression (using monetary policy to shift the wealth of citizens to government). This explains why Bitcoin - a global "cyber currency" - has exploded in popularity. The temptations of this phenomenon are easy to grasp: we crave an opportunity to hold wealth in a currency that cannot be devalued by printing more of it. Bitcoin, alas, is not that. More Bitcoins can be created by those who have a powerful enough computer, although there is apparently a ceiling on the total currency. People are ignoring the warnings, with the price charging higher. It is clearly a bubble - a tempting vessel for money, arriving during the perfect storm of currency debasement and the seizure of savings in a eurozone state - Cyprus. As in every bubble before - from the South Sea Company bubble of 1711 to the dotcom boom and bust at the end of the millennium - investors eagerly part with their money on the conviction that prices will rise and they'll step off at the right time. But no one knows whether today is the day investors wake up to their error. The wise money will steer well clear.