Why Do Financial Influencers (Dimon, Dalio, Belfort) Label Bitcoin a Scam and Side with Warren Buffett
The cryptocurrency market has had many financial influencers take a stab at it, calling it a “scam” to even criticizing said investors for their “stupid” decisions.
Investor and business magnate, Warren Buffett was the first to explicitly share his opinions on Bitcoin and its like, suggesting it to be equivalent to “rat poison squared”. The name calling doesn’t end there, as many others continue to hold a similar viewpoint.
Bitcoin’s price has witnessed several drops, and at some point, it managed to secure a value of USD $6,000 this year. Thankfully, news regarding the U.S Securities and Exchanges Commission (SEC) did not negatively influence its price, proving it has some potential in overcoming hindrances.
To add to Buffett’s Bitcoin comment, comes “Wolf of Wall Street”, Jordan Belfort. According to Yahoo! Finance, Belfort calls cryptocurrencies nothing more than a scam, and this coming from a scammer himself is surely to worry investors.
As per his quotes,
“I was a scammer, I had it down to the science, and it’s exactly what’s happening with bitcoin,”
Adding that people, “kids” in particular, are being brainwashed.
In discussing Belfort’s comments with Yahoo! Finance, one will get the feeling that the proclaimed scammer is being so extreme. More specifically, others have argued that cryptocurrencies are not a scam – it is a real industry. Whether it has created innovation or not remains unanswered, but it exists.
Founder of Bridgewater Associates, Ray Dalio seems to side with Buffett as well, as he shared with CNBC that:
“Bitcoin today you can’t make much transactions in it. You can’t spend it very easily […] It’s not an effective storehold of wealth because it has volatility to it, unlike gold.”
CEO of JPMorgan Chase, Jamie Dimon previously accused the crypto market for being “worse than tulip bulbs,” adding that “someone is going to get killed.” Since this comment made in 2017, Dimon, has apologized for such an extreme outburst and focused more on blockchain technology – giving some “assertion” that it is real.
Who could forget the economist who predicted the 2008 financial crisis, Nouriel Roubini, who strongly opposes cryptocurrencies and the tech behind it. In particular, he called the notion of “decentralization” a “myth”, and believes smart contracts are neither “smart” nor “contracts”.
Ultimately, investors getting themselves involved in cryptocurrencies may have varying reasons and whether one is superior than the other cannot be confirmed.
We have investors who simply track crypto prices to see when the best entry and exit points are and then we have investors who want to see Bitcoin’s journey, as coming up with a projection is still a difficult task. There also exists hodlers, who prefer to invest for long-term purposes and followers, who onboard the crypto train due to all the hype.
Which type of investor are you? Do you have any reasons why you’d prefer to take one position over another? Let us know in the comments below!