Billionaire Howard Marks Calls Bitcoin A ‘Greater Fool Theory’ Investment
The founder of Oaktree Capital Management Howard Marks, stands atop his $1.9 billion fortune, which has plenty to do with the $121 billion in assets that his company manages. Each investor with his firm holds a $2 million average net worth. He has several investment books that he has authored, and he feels confident enough in his stance to proclaim Bitcoin’s eventual demise. He believes that the cryptocurrency will eventually fade out of existence, providing that it never had long-term life in the first place.
These remarks come from a statement Marks made at the 2018 Delivering Alpha conference, which took place in New York on July 18th, 2018. This conference is hosted yearly in a joint presentation between Institutional Investor and CNBC. Specifically, Marks commented that Bitcoin is,
“not an investment…it’s a trade. In the long run, I think it will be shown not to have any substance.”
Marks negative opinion on Bitcoin has even influenced his opinion of those that are willing to purchase it at all. In fact, he went as far as to say that the individuals that are thoughtless enough to purchase Bitcoin are only in it for a quick profit. He said this is a concept called the “greater fool theory.” He continued on, saying,
“They think someone will buy it from them at a higher price. 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.”
Bill Gates agrees with Marks’s remarks, and has said multiple times that there is no actual value in Bitcoin. He believes that it is just one more blip that will implode with the rest of the market that it thrives on. In a quote, Gates mirrored Marks’s belief regarding those that purchase it, saying,
“As an asset class, you’re not producing anything, so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment.”
Unfortunately, Bitcoin has not done itself many favors this year, dropping to a record low of $6,000 since its original rise. This was a major surprise to investors, who expected the price to skyrocket over the summer. While it has regained some of the value, many tech conglomerates and professionals believe that this is just one of the waves that will take it down.
Binance founder Changpeng Zhao, however, remains unwavering. “I’m convinced 100 percent that crypto is the future. I just know it will happen,” he told Bloomberg. He has plenty of evidence to back his opinion, such as his $1.3 billion net worth and his recent cover for Forbes magazine, who recently published their first crypto rich list.
The Winklevoss twins, Tyler and Cameron, are yet another set of crypto tycoons with a net worth of around $1 billion. They have fired back at Bitcoin skeptics, saying that they have a “failure of imagination.” Tyler continued on, saying,
“I’m not sure we’d even sell [when bitcoin price tops $380,950]. Bitcoin is more than gold. It’s a programmable store of money.”