After calling Bitcoin a ‘fad’ and a ‘pyramid scheme’ the man who called the dot com bubble has admitted that he does not understand what is driving the value of Bitcoin, which keeps rising seemingly unhindered.
While many, including traditional investors, come around to Bitcoin and get on board with the digital currency that keeps breaking records in terms of its value, some are still stubbornly skeptical, and a little confused.
Where is the Value?
Howard Marks, the billionaire investor who made his name on Wall Street from calling some major investment bubbles, including the Dotcom bubble, said on CNBC’s Fast Money Halftime Report that he can’t figure out the actual value of Bitcoin.
Speaking about this new-age currency, Marks said:
It’s not a medium of exchange, it’s a medium of trading, so I can’t see any intrinsic value, I don’t understand what’s behind Bitcoin.
He later added:
For me, there is only one kind of investing: When you look at something, you don’t think, ‘Is it going up or down tomorrow?’ … You say, ‘What is the intrinsic value?’ and then you say, ‘Can I buy it for less? […] There is no intrinsic value in Bitcoin.
Value Keeps on Rising
Despite this doyen of traditional investing stating that there is no intrinsic value to the most famous digital currency, its value recently topped $4,000. As such, there are very few assets in the world that can even come close.
Fundstrat co-founder Tom Lee, CEO of Ritholtz Wealth Management Josh Brown as well as another investing legend Bill Miller, are all in the opposite camp of Marks’ as they have thrown their full support behind this up and coming skyrocketing asset.
Lee believes it will be the top performing asset at the end of the year while Miller has said that he is the proud owner of Bitcoin.
Marks was happy to concede on the show that perhaps the digital currency was a technology and an asset that he was simply too old to understand.
“Maybe I’m just too old and too much of a dinosaur to understand Bitcoin,” Marks said jokingly.
However, Marks has still been bold enough to compare Bitcoin to other bubbles that have gone back as far as the 1900 Tulip mania in the Netherlands. It is through his popular memos that the former Oaktree Capital co-chairman warned about a crash in Bitcoin.