Short seller Jim Chanos, enfamous predicter of Enron Corporation’s fall, has a new personal view on Bitcoin. Plain and simple, it will fail in time of a crisis.
Traditional Fiat currencies like the USD have some advantages on the virtual currencies when things go bad. And that is because governments are able to enforce their use and act lenders in case of a last resort during the time a crisis occurs.
Chanos mad several statements throughout an interview with the Institute of Economic Thinking, published on Monday. Many of them were in relation to the virtual currencies of the world not having the backing that fiat currencies do.
“For those who believe that you need to own digital currency as a store of value in the worst-case scenario, that’s exactly the case in which a digital currency will work the least,” Chanos said. “The last thing I’d want to own is Bitcoin if the grid goes down.” He then followed with.
Food would be a much better option, he finally added.
The last year has created a sense of Euphoria around Bitcoin, as well as other Cryptocurrencies. And they are now being filled into the fraud cycle, which is when the public are less skeptical of an emerging market due to heavy gains seen it. Which is basically what happened with Bitcoin, it exploded since the Fall of 2017, making it a highly desirable market to get involved in.
Normally, markets with such heavy gains would be seen as a good thing, but not in terms of Bitcoin apparently. The bull market of the 1990s collapsed along with Enron. Later, there was a second going with the global financial crisis that occurred during 2008.
“We’re now nine years into this bull market, same as the ’90s, so I suspect that now things are starting to percolate,” Chanos said, pointing out Bitcoin and other ICOs for other alt-tokens. “This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”
What do you guys think? Did Mr. Chanos foolishly declare bitcoin as the last currency fit for a crisis?
Guess one would ask which kind of crisis, but truth be told, bitcoin is a global game and would take all but a global blackout or concentrated effort to overtake the network. And in doing that, thus all but surrender it useless unless it was the only option in which there really would be a centralization crisis..in which one of bitcoin's forks (cough cough) could be the solution.