Bitcoin might be all hype, but it could withstand a crash and become legitimate, particularly if it sees enough gains in 2018, according to tech investor Roger McNamee.
Bitcoin is "still a very small market in the context of the larger financial world, but it has had a huge year. We've done it around a speculative mania," the co-founder of venture capital firm Elevation Partners said Thursday on CNBC's "Fast Money." "If a mania goes on long enough, it becomes self-fulfilling. Even after a crash, what follows is a legitimate industry."
But in order for Bitcoin to earn its legitimacy, it needs to stick around long enough – and continue to keep investors on their toes, said McNamee, who was an early investor in Facebook.
"With the amount of activity going on around it, there are people willing to invest the kind of dollars it takes to make a thing like bitcoin into a long-term part of the financial market," McNamee said, comparing it to the dotcom bubble that sent America into recession before rebounding as a major industry.
Making it through 2018 is important for another reason, too. McNamee thinks bitcoin is still too new for investors to know just what role it could play in the future of the financial markets. But the volatility of 2018 just might make that more apparent.
"You'll have these big swings, up and presumably down, as well. And, you know, wherever that settles out I think will tell us a lot about the role of bitcoin long-term," he said.
"I don't think it will be the end of the story either way," McNamee added.
Bitcoin was recently down 8.4 percent at $14,087.93 on Luxembourg's Bitstamp exchange. The cryptocurrency has rocked back and forth after hitting a high near $20,000 in November.