JPMorgan CEO Jamie Dimon recently called bitcoin a “fraud” that “won’t end well.” The cryptocurrency is up 800% in the past year. So bitcoin investors can have a good laugh at Mr. Dimon’s expense, for now.
Important questions and skepticism remain. Among the cryptocurrency's big skeptics is currency guru and bestselling author Jim Rickards. He sat down to discuss this (and much more) during a new "Real Conversation" with Hedgeye CEO Keith McCullough.
Rickards begins: “This is the only topic where I agree with Jamie Dimon. I've been a pretty harsh critic of Jamie Dimon. But when he says 'it’s a fraud, it's a Ponzi'[ scheme]'-- I agree completely. I call it a Ponzi with no one in charge. There's no Madoff, but it's working that way.”
While bitcoin has its fervent supporters, Rickards says the cryptocurrency invented in 2009 still has too much to prove, and is involved in too many shady transactions to be taken seriously. He cites things like drug dealing, arms dealing, money laundering and tax evasion, as well as "worse things that I don't want to even mention, more reprehensible than that.
"He goes on further: “Bitcoin has not been combat tested in a business cycle. We have not had a recession or a financial crisis since 2009. I’ve seen all these other asset classes go through many business cycles. I know how they’ll behave. Bitcoin has not been tested in that arena.”
Rickards and McCullough both say they have both been accused of being "technophobic" because of their distaste for bitcoin. Rickards says that couldn’t be further from the truth.“A lot of my private equity investments are very forward-leaning in technology. I embrace technology. But I know a lot about markets. A lot of the tech groupies who love bitcoin know a lot about tech, but not so much about the markets.”Until proven otherwise, Rickards says investors should stay away.“For the market as a whole, for wealth managers, for people trying to preserve wealth, for investors, this is no place to be,” Rickards says.
- Source, Hedgeye
