Dennis Gartman, the editor and publisher of The Gartman Letter, who has also been called the “commodities king,” continues to call bitcoin one of the silliest ideas he has heard in a long time, a position he expressed on CNBC’s “Futures Now.” He said he expects the bitcoin market will fall when its value drops to $5,000. He has criticized bitcoin for having no intrinsic value, and he recently said it makes the tulip bubble in 17th century Holland that sent the Dutch into a frenzy look almost like a “quiet, well demeanored market.”
At the same time, Gartman considers blockchain technology brilliant.
Bitcoin's 'Demise'Will Boost Gold
Gartman said bitcoin will fall when it trades under $5,000. He said it will burn its investors and when it does, investors will rush into gold.He was uncertain when bitcoin will crash, but when it does, there will be money at the margin that had moved from gold to bitcoin that will return to gold once again.
Gartman has called previously called bitcoin a market for criminals, millennials and “pure punters.”
He has argued that bitcoin’s price volatility undermines its use as a currency. He has questioned how one could buy or sell a painting using bitcoin, when its value changes 20 to 40 percent in the course of a week.
It has been pointed out, however, that bitcoin's price will necessarily exhibit volatility as the global market determines its fair value. Gartman’s point about volatility also ignores the prevalence of payment processing services such as BitPay, which automatically convert cryptocurrency payments to local fiat currency at the point of sale to shield businesses from price volatility. These services also help companies use cryptocurrency to streamline supply chain payments across borders.
Featured image from YouTube/Bloomberg.