The bitcoin price is going to "collapse" soon despite the latest rally because cryptocurrencies are worthless. That's the opinion of Peter Mallouk, the president of Kansas investment firm Creative Planning. “What we’re going to see, most likely is, we’re going to see cryptocurrencies collapse," Mallouk…
The bitcoin price is going to “collapse” soon despite the latest rally because cryptocurrencies are worthless. That’s the opinion of Peter Mallouk, the president of Kansas investment firm Creative Planning.
“What we’re going to see, most likely is, we’re going to see cryptocurrencies collapse,” Mallouk told CNBC.
The bitcoin price mysteriously spiked on April 1 and climbed above $5,000 for the first time since November 2018.
While cryptocurrency bulls insist this is a sign that the Crypto Winter is officially over, Mallouk urges caution.
Mallouk, a certified financial planner, says investing in bitcoin is a terrible way for young people to build wealth. Why? Because he says there are too many cryptocurrencies and most of them won’t survive.
Besides, crypto is too speculative and risky, he says.
“There’s no way that even a fraction of them can survive. Is it possible that maybe one or two will work out in the future? Sure it is.”
“In the meantime [if you invest in crypto], you get no income. It’s not a real investment. It’s speculation.”
Instead, Mallouk says you should invest in real estate, where you can collect rent; in stocks, so you can earn dividends; or in bonds, where you can collect yields. “You don’t want to own something that’s not going to pay you,” he advises.
For blockchain fans, Mallouk says they can still invest in blockchain companies without throwing their money away on crypto.
“There are companies that are very heavily investing in blockchain and you can buy those companies — companies like IBM and Accenture.”
“Companies like Walmart are using it to develop ways to run their inventory. That’s the way to play blockchain technology — not by trying to buy cryptocurrency.”
Mallouk says while the disruptive potential of blockchain technology is real, “that doesn’t mean that bitcoin is going to work out or Ripple is going to work out.”
He then pointed to the Blackberry and Palm Pilot as examples of new technology that consumers were initially excited about before they fizzled out.
Peter Mallouk’s skepticism of cryptocurrencies isn’t new. In December 2018, Mallouk called bitcoin a “dead man walking,” and predicted that the bitcoin price will drop to zero.
At the time, crypto was in the midst of a brutal bear market. Mallouk said the prolonged market downturn was proof that that the end was near.
Mallouk added that bitcoin could experience a dead cat bounce (i.e., a temporary recovery), but it’s ultimately heading to zero.
“I think the bottom for bitcoin is zero, and that’s where it’s heading. Everything about bitcoin is speculation or fraud.”
Despite his distaste for bitcoin, Mallouk underscored that blockchain is a revolutionary technology that will fundamentally change how industries do business, from traditional banking to supply chain management.
However, Mallouk said crypto advocates shouldn’t expect the blockchain revolution to save bitcoin, which is doomed to fail.
“Make no mistake, blockchain is the real deal. But just because blockchain technology is creating a new paradigm doesn’t mean that bitcoin shares that same distinction.”
Last modified: April 23, 2019 7:17 PM UTC