Billionaire Howard Marks, the co-founder of Oaktree Capital Management, said bitcoin will eventually fizzle out and prove once and for all that it never had any substance.
Marks, whose net worth tops $1.9 billion, made the scathing remarks at the 2018 Delivering Alpha conference in New York on July 18. The annual hedge fund summit is jointly presented by CNBC and Institutional Investor.
Marks said bitcoin is not a worthwhile long-term investment vehicle, but merely a short-term trading opportunity.
“[Bitcoin is] not an investment…it’s a trade,” Marks told CNBC . “In the long run, I think it will be shown not to have any substance.”
Marks said people who are buying bitcoin do so only because they want to turn a quick profit by selling off their holdings to a “greater fool” than themselves.
“This is what we called, when I was a kid, the ‘greater fool theory,'” he said.
“They think someone will buy it from them at a higher price,” Marks said. “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.”
Howard Marks’ sentiments echoed those of billionaire Bill Gates, another notorious bitcoin skeptic. As CCN.com previously reported, Gates said bitcoin has no inherent value and ultimately will implode along with the rest of the cryptocurrency market.
“As an asset class, you’re not producing anything, so you shouldn’t expect it to go up,” Gates said. “It’s kind of a pure ‘greater fool theory’ type of investment.”
According to Forbes, Marks’ Oaktree Capital has $121 billion in assets under management, and its average investor has a net worth of $2 billion. Those are some huge financial whales that Marks and his investment firm are advising to steer clear of the crypto industry.
Bitcoin has recently rallied after plunging below $6,000 for the past few months. The summer slump was unexpected, as many market observers had expected cryptocurrency prices to surge.
Despite the increasing drumbeat of cryptocurrency naysayers, today’s new crop of tech billionaires has no doubt that bitcoin is the undisputed wave of the future.
“I’m convinced 100 percent that crypto is the future,” Binance founder Changpeng Zhao told Bloomberg . “I just know it will happen. Zhao, whose net worth tops $1.3 billion, was recently featured on cover of Forbes magazine’s first-ever crypto rich list.
Similarly, the Winklevoss twins Tyler and Cameron (estimated net worth: $900 million to $1.1 billion) say bitcoin skeptics who flippantly dismiss cryptocurrencies suffer from an epic “failure of imagination.”
“I’m not sure we’d even sell [when bitcoin price tops $380,950],” said Tyler Winklevoss. “Bitcoin is more than gold. It’s a programmable store of money.”
Featured image from Youtube/Bloomberg .