Former Bloomberg Editor Warns About Bitcoin (BTC), Questions What Justifies its Valuation
There was a saying that ” nothing sells better than fear”. Now with the dawn of the fake news era, people are questioning everything. This makes it harder for news outlets to simply report rumors. However, it has also complicated matters as good sources and facts are hard to investigate. Thus when Matt Winkler the former Editor-In-Chief at Bloomberg took aim at Bitcoin (BTC), he did temper it with caution.
The Second Advent
The meteoric rise of Bitcoin had excited many to claim the new era of digital money. Now, with the sobering market turmoil and downturn, Mr. Winkler, in a recent interview discussed his take on cryptocurrencies in general and BTC in particular.
A well-known business reporter, Mr. Winkler talked about the Dotcom boom of the 90s. Many commentators had looked with suspicion at the rapid growth of IT at that time, and it did not help that startups were valued by their cash earnings, which he felt was a questionable indicator. Thus when the market went into meltdown in 2000 it was seen as a justification of the prudence that had been counseled.
When last year Bitcoin started gaining traction, many economic and business pundits saw the similarities. The award-winning American correspondent pointed out that in its case, it is even harder to agree on a valuation as the “intrinsic worth” of such a technology is hard to establish.
Proceed With Caution
Specifically taking aim at the leading crypto, BTC, Mr. Winkler noted that business mogul Warren Buffet had lambasted Bitcoin as an asset with no actual value. He went on to deliberate “Bitcoins don’t pay interest like bonds or generate profits like companies, so it takes some mental gymnastics to come up with a valuation measure.” While the statement is well grounded in sound economic principles, it fails to take in to account the untapped potential that the technology has demonstrated.
Talking about the possibility of recovery, Mr. Winkler laughingly said: “I’m not clairvoyant and I think that this answer is way above my pay-grade.” The reporter, using his vast experience in both as a business observer and a newsman, asked: ” What justifies its valuation which we see in the marketplace?” If there are no clear answers that stand out, he reasons vigilance is warranted, “when it’s difficult to find the answers, you ought to be pretty cautious.”
Accepting that the current market forces together with his past experience have made him rather skeptical of the whole “cryptocurrency mania”. Although, he does concede that there is a lot of potential in Blockchain. While decentralized ledger technologies could be the future, cryptos are not.
Bloomberg Network Pushing an Agenda?
Mr. Winkler seems to be from a long line of Bloomberg-affiliated reporters who are rather skeptic of Cryptos. In return, the wider crypto community has repeatedly berated the news portal for its septic coverage of Bitcoin and associated news.
Mike Dudas, a well-known fintech entrepreneur is the founder and CEO of The Block. He pointed out that Bloomberg’s latest article on
“Bitcoin being a bubble”, one amongst many. In fact, he says”Bloomberg runs Bitcoin bubble piece for the 300th consecutive day.”
This has led the Crypto enthusiast to question if this is legitimate news or negative propaganda done on purpose.
Armin Van Bitcoin, a prominent crypto advocate from Canada, took a more light-hearted approach. He twitted about how becoming a Bloomberg journalist involved not caring about global debt or if government centralized control of monetary supply.
The Crypto Fam, a community of crypto enthusiasts, did not see anything funny and felt the sites agendum was more sinister. Citing a recent expose by a business insider on Bloomberg’s questionable practices to back their claim, they alleged that employees were paid to “‘move markets’, a practice that lends itself to sensationalism and hyperbole.”
This is after a recent news piece printed by the well-known publication was shown to have a glaring lack of knowledge about Cryptos and Crypto based ATMs. It had unsurprisingly, prompted sharp reactions from crypto’s most prominent participants. Some have seen this as a plot, Bloomberg siding with centralized financial institutions, to ensure the failure of Bitcoin.
This certainly feels a bit of a stretch and borders on being a tin foil hat conspiracy theory. A more logical explanation would be that the experienced journalists and the media houses own past experience coupled with the vagaries of the current market, concluded that they would grab more attention by selling fear. Bloomberg News’ crypto branch has been pushing on negative content pertaining to this digital asset. If it persists with its tactics these voices will only grow louder. Whether the news outlet take notice and a course correction is implemented, one has to wait and see.