Reading: Bitcoin is ‘Not an Investment … It’s a Trade,’ Says… Georgi Georgiev | Jul 21, 2018 | 01:00 Howard Marks, co-founder and co-chairman of Los Angeles-based distressed debt investor Oaktree Capital Management, slammed Bitcoin for not having any substance — while saying investors are merely speculating on its price without being able to judge its intrinsic value. Marks took part in CNBC’s eighth annual conference for institutional investors – Delivering Alpha — which was held in New York, where he expressed his rather negative sentiment towards the first and foremost cryptocurrency.
Marks noted that Bitcoin (BTC) $7314.33 -0.11%, which has a market capitalization upwards of $126 billion, fails to fulfill the definition of an investment, stating: It’s not an investment … it’s a trade. He went on to imply that any and all long-term investors are merely speculating on its price, stating that those who buy Bitcoin do so “Not because they can specify its intrinsic benefits.
Not because they can judge the intrinsic value. But only because they think it’s going up.” The billionaire investor also made reference to the “Greater Fool Theory” — a popular argument which defines the price of an asset not by its intrinsic value but rather by the expectations of the market participants.
Marks also expressed his bearish stance on the future of Bitcoin, stating: In the long run, I think it will be shown not to have any substance. Meanwhile, one of the world’s largest financial services providers, MasterCard, won a patent which purports to pave the way for crypto-based credit card payments — essentially hinting that the company believes cryptocurrencies are here to stay.
It’s worth noting that Marks’ latest talks are fairly lighthearted compared to his previous outbursts on Bitcoin. In one of his memos of 2017, he slams cryptocurrencies as an “unfounded fad”: In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme) based on a willingness to ascribe value to something that has little or none beyond what people will pay for it. Read more from bitcoinist.com…
thumbnail courtesy of bitcoinist.com