Bitcoin is a bubble! Bitcoin is a scam! Bitcoin is a Ponzi scheme! Bitcoin will crash soon! How many times have you heard these and similar comments from people who seem completely convinced they are right? Too many times, right? Well, me too. Bitcoin, and by extension the whole cryptocurrency industry, has been described as the biggest bubble in recorded history by more people than we care to remember. Such statements are particularly bold considering that there have been some huge bubbles over the years, such as the Dutch tulip bubble of the 1630s, the Japanese real estate and stock market bubble of the 1980s, and the more recent dot-com bubble of the early 2000s. Will all these doubters become convinced that Bitcoin and the blockchain are here to stay and that ‘a bubble’ is the one thing it’s not?
Investment Titans To Tech Pioneers
When someone on Twitter comes out and condemns cryptocurrencies, or someone rants on Facebook about how it’s all about to come down before the year ends, we tend not to take them seriously. After all, which revolution ever garnered everyone’s support? We do our best to correct them and to enlighten them about the revolution that cryptos are part of, but that’s as far as it goes.
However, when one of the richest men calls Bitcoin a scam, it’s a different reaction altogether. Warren Buffet has been among the most vocal opponents of cryptocurrencies. Just recently, in an interview with Yahoo Finance, Buffet described cryptocurrencies as a game and a gamble, and interestingly added that “no one knows exactly what Bitcoin is.” This is not the first time Buffet has openly condemned cryptos; in the past, he’s referred to them as scams and the biggest bubble in history. In another interview earlier this year, he declared that he was certain that cryptos would come to a bad end. The most interesting part of that particular interview, which was conducted by CNBC, was when Buffet admitted to not knowing much about cryptos.
Buffet is not alone in condemning cryptos. Less than a week ago, former PayPal CEO Bill Harris described Bitcoin as the biggest scam in history. In a blog post, Harris, who was also one of the founders of PayPal, described Bitcoin as a colossal pump and dump scheme, “the likes of which the world has never seen.” His sentiments are echoed by Jeffrey Robinson, a renowned journalist whose book, “BitCon”, was intended to discredit Bitcoin as far back as 2014. In his book, Robinson described Bitcoin as a pretend currency which has no real use and which won’t be accepted by the masses. That was back in 2014 when the price of Bitcoin was below $1,000 and when not many people in the world had embraced cryptos. Robinson is, however, unmoved, and in an interview earlier this year with CNBC, he called Bitcoin a loaded roulette wheel.
You’re better off in Vegas. The food is better.
Institutional Condemnation
The condemnation has not been left to prominent individuals alone. Some major global institutions have also made their stands against cryptos known, one of which is the Bank for International Settlements (BIS). BIS, which facilitates international monetary and financial cooperation, came out and condemned cryptos as a “combination of a bubble, a Ponzi scheme and an environmental disaster.” Its general manager, who doubles as the governor of the Bank of Mexico, questioned the sustainability of cryptos and called on authorities to clamp down on the crypto industry.
Munich-based global investment giant Allianz, which has over $81 billion worth of investment, has come out and condemned cryptos as well. Its head of strategy described cryptos as a bubble, saying that despite their liquidity, they lack intrinsic value. The firm went on to state that Bitcoin’s demise would have a negligible spillover effect on the ‘real world’, as the market capitalization of cryptos is still relatively small.
