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Bitcoin Only Used for Money Laundering and Speculation: ‘Big Short’ Investor

Last Updated March 4, 2021 5:07 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:07 PM

Wall Street veteran Steve Eisman rose to fame by shorting the sub-prime mortgage market ahead of last decade’s financial crisis. Now, he’s similarly-bearish on a new asset class: cryptocurrency.

Eisman, whose career is chronicled in The Big Short, told CNBC  that he has yet to meet anyone who can persuasively argue that cryptocurrencies have social utility.

He said:

“I’m not an expert on cryptocurrency, but I have my doubts about it. My doubts center on the fact that, ‘What’s the social utility of cryptocurrency?’ I’m not talking about blockchain. The technology, I think, has real value. But currency markets are the most liquid, most efficient markets, probably of any markets that exist.”

While conceding that there are a few exceptions to this rule — Venezuela, for instance — the Neuberger Berman portfolio manager argued that in developed countries the only use cases for cryptocurrency are speculative investing and money laundering.

“I think the social utility, at least in developed countries, is extremely small. The only thing I can really figure out the usage of it is that it’s good for speculation, and it’s good for money laundering.

The interview marked the second time in this week alone that Eisman had bashed bitcoin. As CCN.com reported, he said at an industry convention in Hong Kong that he believes the asset class has no legitimate purpose and that he won’t touch it.

Even so, Eisman reiterated that he has no plans to make bitcoin his next “big short,” both because he does not specialize in currency trading and because he does not believe it is possible to assign bitcoin a fair market value.

“It’s like arguing how many angels can dance on the head of a pin,” he said. “I have no idea how to value it, and I don’t think anybody else does either.”

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