- Bitcoin's rapid rise over the past few days is "utter and complete nonsense," Dennis Gartman said.
- He called it a "classic bubble."
- However, the addition of futures contracts should help moderate the market over the long term, said Gartman.
Bitcoin is in a "classic bubble" and has even gone beyond the "absurdity" of Holland's tulip bulb mania in the 1630s, widely followed investor Dennis Gartman told CNBC on Thursday.
The cryptocurrency rocketed above $19,000 for the first time on Thursday before falling sharply from its record high.
"What we're seeing in the past 48, 54, 72 hours … is utter and complete nonsense," the editor and publisher of The Gartman Letter said in an interview with "Closing Bell."
Bitcoin began the year below $1,000. On Tuesday night, it topped $12,000 after dropping 20 percent the week before. Between 5 and 6 a.m. ET on Wednesday, it jumped past $15,000.
On Thursday, bitcoin hit a high of $19,340 on the Coinbase exchange, which accounts for about a third of the digital currency's volume on any given day. It then fell more than 20 percent from that level to $15,198.63.
At 5:39 p.m. ET, the digital currency traded at $16,315.03. The price on Coinbase has traded at a premium to the level on other exchanges.
Gartman isn't the first to compare bitcoin's bubble to the tulip craze, which is considered the first major financial bubble. Billionaire hedge-fund manager Ken Griffin told CNBC recently, "Bitcoin right now has many of the elements of the tulip bulb mania we saw back hundreds of years ago in Holland."
Back then, tulips become such a prized commodity that they were being traded on many Dutch stock exchanges in 1636 and many people traded or sold possessions to get in on the action, according to Investopedia.
The bubble came to an end in 1637, which resulted in bulbs trading at a fraction of what they once had, "leaving many people in financial ruin," the article said.
Even bitcoin investor Richard Johnson is surprised by the digital currency's wild ride.
"I generally consider myself a bitcoin fan and crypto bull but even the action of the last few days has made my eyes water," the analyst at Greenwich Associates said in an interview with "Closing Bell."
However, the addition of futures contracts should help moderate the market over the long term, said Gartman, who in the past has called bitcoin a market for criminals and millennials.
Chicago-based Cboe Global Markets is set to launch bitcoin futures on Sunday, and CME, the world's largest futures exchange, is planning to launch its futures product next week. Both exchanges are regulated by the Commodity Futures Trading Commission.
"With the advent of the futures markets, it will tend to stabilize this. It will probably send prices lower. It will take out some of the volatility. But it won't happen for a week or two," Gartman said.
— CNBC's Evelyn Cheng contributed to this report.