Are Millenials To Blame For Bitcoin’s Rise?
Howard Marks has some harsh words for the bitcoin community and the rise of digital currencies, which have become all the rage lately.
“Digital currencies are nothing but an unfounded fad,” said the co-chairman of Oaktree Capital Management, who was among the first to sound the alarm on the 2008 financial crisis.
Marks said bitcoin BTCUSD, +3.89% is “based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” wrote Marks in his latest memo to clients.
The billionaire investor believes an increasing lack of faith in fiat currencies on top of millennials’ love of “all things virtual” have allowed cryptocurrencies to emerge as a potential investment tool.
“Maybe I’m just a dinosaur, too technologically backward to appreciate the greatness of digital currency. But it is my firm view that the ability of these things to gain acceptance is just one more proof of the prevalence today of financial naiveté, willing risk-taking and wishful thinking,” he said.
Marks boasts a net worth of $2 billion, according to Forbes. His investing letters are often parsed by market participants for insightful nuggets.
He freely admits he is stumped by cryptocurrencies and says he isn’t alone among savvy Wall Street investors puzzled by its rise.
“But they are not real!!!!! Nobody has been able to make sense to me of these currencies,” he said.
One of the biggest pitfalls of bitcoin and its digital peers, according to Marks, is that they are mostly used to buy other “imaginary” money or to invest in companies that will create other new currencies.