Bitcoin: What do the experts say?
If ever there was going to be a buzzword for 2018, “bitcoin” will almost certainly be up there as one of the main contenders. Known as the main cryptocurrency, coming into existence in 2009, few had heard of bitcoin just 5 years ago.
Today, there are over 1,000 cryptocurrencies and that number is growing all the time. Users of the Revolut bank account can now buy and exchange Bitcoin (plus two other cryptocurrencies called Litecoin and Ethereum), whilst these controversial currencies are even being used by companies to raise money, via Initial Coin Offerings (ICO’s).
But opinions on bitcoin are mixed, and as cryptocurrencies are increasingly entering the mainstream, more and more individuals are coming forward to offer their penny’s worth… no pun intended.
I must say, my findings from my research in writing this article somewhat surprised me. It turns out that most experts offer a similar perspective when asked to comment on bitcoin.
In the last few days Nouriel Roubini, the economics professor credited with predicting the 2008 crash, said in a Bloomberg interview:
“It is the mother of all bubbles and it is the biggest bubble in human history.”
Billionaire investor Warren Buffett told CNBC’s “Squawk Box” last month:
“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending… We don’t own any, we’re not short any, we’ll never have a position in them.”
In a December 2017 interview with CNN, “Wolf of Wall Street” Jordan Belfort said:
“I think it’s a huge danger right now that people are looking at this as the next great thing, it’s a bubble for sure. The next stage, you will see it really skyrocket, there will be a short squeeze, it will go even higher and then eventually it will come caving in, it’s almost a guarantee.”
Legendary investor Carl Icahn says:
“I don’t understand it… If you read history books about all of these bubbles…this is what this is.”
JP Morgan boss Jamie Dimon also delivers a damning verdict:
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart… It is worse than tulip bulbs.”
For those wondering, “tulip bulbs” is referring to a historic market crash in Holland.
However, there are some outspoken enthusiasts. John McAfee, the renown software founder and entrepreneur, tweeted in December 2017:
“For you who are long term investors like myself: (those who allways make the most returns), BITCOIN is still the crypto giant. It is at a low price, and will never be cheaper. It will be ten times this price in 2018. Remember — it has the lowest circulating supply of any coin.”
Meanwhile, another bitcoin supporter is Spencer Bogart, a partner at Blockchain Capital, has said that he believes the cryptocurrency could trade at over $50,000 this year. Bogart also admits that bitcoin is still a “bit of an exotic product for institutional investors” (judging by the opinions cited in this article, he’s right there), but that young adults are leading the charge in investing (there are some interesting stats on millennials and bitcoin in this poll).
So there you have it. Whilst there are opinions at both ends of the spectrum, it appears that most of the experts coming out definitively in favour of bitcoin are those somehow involved with, or invested in, the cryptocurrency world. On the other hand, negative bitcoin predictions are easily found.
Whilst cryptocurrncies will continue to fluctuate in value, today’s investors are wondering whether they will see an increase in their value if they invest for the medium- to long-term. Or, has that boat now sailed?
Time will tell.
Monday 5th February, 2018