Vanguard chairman Bill McNabb is closely following the gyrations of various cryptocurrencies, write Tom Mackenzie and Cecile Gutscher for Bloomberg.

“The cryptocurrency trading that’s going on right now actually worries me a little bit,” said McNabb. “I think there’s a lot of leverage; I think there’s a lot of speculation. If something seems to be too good to be true, it probably is.”

The debate is mostly over Bitcoin, the largest digital currency, and whether it would be able to stand up to regulatory scrutiny following its 21 percent jump during the first three weeks of this year. The question was also raised as to whether its correction is evidence of the speculative bubble bursting.

But McNabb believes that the risk of Bitcoin’s bubble bursting and destabilizing markets is not systemic, but more of a strong idiosyncratic risk.

“I think the blockchain technology that underlies cryptocurrencies is one of the most exciting developments in technology,” he said. “I think there are all kinds of potential uses of it and applications that we’re just beginning to talk about.”

Read the entire interview at Bloomberg here, and check out previous VISTA Today coverage of Vanguard here.

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