If Bitcoin is a Pyramid Scheme We Need More Pyramid Schemes

Tonight Bitcoin is crossing $3,000 ($52 billion in total market capitalization or 3 Snapchats).

This year over $1.6 billion has been raised using ICO’s.

This must be a pyramid scheme!

So says Howard Marks in his letter which I shared in my post yesterday. Here it is again.

Here is a chart shared on Stocktwits just now as Bitcoin surged past 3,000 (now almost 3,200):

Howard manages $99 billion and not one dollar is allocated to Bitcoin. I imagine he gets asked a lot about Bitcoin seeing he has mostly 70 year old white LP’s and they all read Barron’s cover story a few weeks ago about Bitcoin.

I assume Howard tasked a few hundred analysts to get him up to speed on Bitcoin.

The verdict is ‘pyramid scheme’.

Why so glum about Bitcoin Howie?

“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,”

“Serious investing consists of buying things because the price is attractive relative to intrinsic value,” he continued. “Speculation, on the other hand, occurs when people buy something without any consideration of its underlying value or the appropriateness of its price.”

The lesson:

People in glass houses with $99 billion get to be really wrong, and condescending.

My takeaway:

If Bitcoin is a pyramid scheme…we need more pyramid schemes.

Originally published at Howard Lindzon.