Peter Mallouk, a $30 Billion Dollar Investment Firm CIO: ‘Bitcoin to Become “Worthless” in Future’
Bitcoin is closing the year as one of the most volatile assets having dropped from a high of US$18,000 at the start of 2018 to less than US$3,500 today. The huge drop has caused a lot of criticism on the digital asset with the latest call being “a drop to zero”.
Peter Mallouk, the president and chief investment officer of Creative Planning Inc., a Kansas investment firm that manages $32 billion in assets said in an interview. Furthermore, Peter termed Bitcoin “a dead man walking” with no hope in future.
In an interview with Forbes, the well affirmed Bitcoin critic further commented,
“It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral. Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking.”
‘Bitcoin will become worthless in future’
Mr. Mallouk has had strong predictions of Bitcoin falling off its exorbitant prices given the asset is used for speculation and fraudulent activities. In an interview with Bloomberg, Peter reaffirmed his prediction of Bitcoin falling to zero due to the speculation that lacks any form of drive.
Notwithstanding, he placed Bitcoin as a failure that future generations will look at in future for reference and caution on the dangers of bullish extremism. The failure will heavily affect those bullish investors that are ‘desperate to make a silk purse out of a sow’s ear’. According to Mallouk, the end of Bitcoin enthusiasts will ‘not be pretty for them’.
“I think the bottom for bitcoin is zero, and that’s where it’s heading. Everything about bitcoin is speculation or fraud.” – Mallouk, Bloomberg.
The speculative curse for Bitcoin
In his interviews and columns, Mallouk clearly calls out the speculative aspect of Bitcoin as the biggest factor that will destroy the asset, albeit fraud. He echoed the ‘greater fool theory’ that states that people buy Bitcoin in order to sell it to another investor at a higher rate by selling it to a “greater fool” than themselves.
Instead of looking at the intrinsic value of the asset, investors buy the asset to turn a quick profit. The speculative curse is also heavily spoken about by Billionaire Howard Marks of Oaktree Capital who believes Bitcoin holds no substance. Marks sees a bleak future for Bitcoin due to the speculative nature of the asset. He said,
“If you think it’s a fun way to try to make a big score, you’ll probably have better luck throwing darts at microcap stocks. But if you’re doing it purely speculatively, and you’re prepared to lose all your money, keep doing what you’re doing.”
The rise of Altcoins and cryptocurrencies
Peter remains skeptical on Bitcoin but has a soft spot for other cryptocurrencies and other blockchain technologies. In as much as Bitcoin is doomed to fail, Peter Mallouk agreed that blockchain will revolutionize the world and fundamentally change how industries do business, from traditional banking to supply chain management.
The success of crypto and blockchain technology will however not save Bitcoin from collapse. He said,
“Make no mistake, blockchain is the real deal. But just because blockchain technology is creating a new paradigm doesn’t mean that bitcoin shares that same distinction.”
In conclusion, Mallouk summarized the failure of Bitcoin to arise from the speculative aspect of the coin, regulations from authorities and the government and the rise of other cryptocurrencies.