Renowned stock market short selling guru Jim Chanos is of the opinion that bitcoin would fail in the event of crisis or instability because the digital infrastructure involved in its use would be impractical.
Jim Chanos. Source: CNN
Chanos, who achieved fame and notoriety at the turn of the millennium for being the Wall Street analyst who made millions by shorting Enron stocks ahead of its collapse in 2001, said that despite the hopes of bitcoin evangelists, the digital currency would become worthless in times of crisis or upheaval.
“Food Would Be Better”
Speaking in an interview with the Institute for New Economic Thinking on June 4, 2018, Chanos stated that in times of uncertainty, fiat currencies such as the US Dollar have a critical comparative advantage over digital currencies.
He believes in fiat’s superiority because the government enforces its use, and it can provide backing for them as a lender of last resort, which gives fiat a guarantee of stability that cryptocurrencies cannot have.
Going further Chanos said:
“For those who believe that you need to own digital currency as a store of value in the worst-case scenario, that’s exactly the case in which a digital currency will work the least. The last thing I’d want to own is bitcoin if the grid goes down. Food would be better.”
Much Ado about Failure of Bitcoin
The comments made by Chanos mirror a sense of antipathy toward bitcoin which is shared by a widely varying group of interests ranging from Altcoin founders to institutional investors and banks. BTCManager earlier reported comments by Ripple CEO Brad Garlinghouse stating that bitcoin will share a similar fate to Napster and other defunct Internet startups.
In April 2018, Michael Hartnett, chief investment strategist at Bank of America was also quoted saying that bitcoin has peaked and the bubble is set to burst.
In all of these cases, bitcoin appears to be disliked because while it dominates the cryptocurrency market so heavily to the chagrin of competitors, it refuses to behave as a conventional asset, which makes it difficult for institutional investors and traders to engage with it either for portfolio trading or short trades.
“Speculation Game Masquerading as Breakthrough”
Chanos on his part remains convinced that bitcoin has no long-term future, describing the market optimism for bitcoin and other cryptoassets as a part of the “fraud cycle.”
Outlining his thoughts on bitcoin‘s future, he said:
“As business and particularly financial markets improve, people’s sense of disbelief and caution that they’ve often earned from the previous downturn begins to erode. Schemes that before might have seemed too good to be true begin to be embraced.”
“I suspect going forward we’re going to see more and more evidence of questionable companies as this bull market keeps advancing and aging. We’re now nine years into this bull market, same as the ‘90s, so I suspect that now things are starting to percolate. I think bitcoin and the ICOs are just one manifestation of that.”
The post Jim Chanos is Not a Fan of Bitcoin: Here’s Why appeared first on BTCMANAGER.
Source: BTCManager.com
Original Post: Jim Chanos is Not a Fan of Bitcoin: Here’s Why
