Bitcoin’s Boom/Bust Nature is Making it Hard to Convince Billionaires

Fatir MalikJune 12, 2019

3 minutes read

Bitcoin (BTC) Crosses $11,000 as The Hype Explodes

American billionaire, Stanley Druckenmiller, who was the chairman and president of Duquesne Capital, shared his anti-bitcoin notion in an interview. Hosted by Key Square Capital Management founder, Scott Bessent, at The Economic Club of New York, Druckenmiller clarified his stance regarding bitcoin and other cryptocurrencies by stating that he isn’t interested in investing any of his $4.4 billion worth into any cryptocurrency because of volatility.

Bitcoin, introduced to the world over a decade ago, has finally attained the attention of many. However, once bitter enemies, governments and regulators, have changed their thoughts about bitcoin to great extents. Although bitcoin has convinced governments of countries like France, Chile and Brazil (to name a few), to lay out regulations for cryptocurrencies, many of the world’s billionaires are still do not find any good in bitcoin.

While revealing that he doesn’t aim to short or long bitcoin in any way, Druckenmiller told that he couldn’t understand the reason behind bitcoin possessing an inherent value. In this regard, he said:

I don’t think I’m a neanderthal, which is what I’ve been called when I’ve said I didn’t want to own Bitcoin.

Besides being unable to comprehend the intrinsic value of bitcoin, Druckenmiller had outlined volatility of bitcoin to be quite troublesome. He even invested in a cryptocurrency project, Basis, that claimed to be a non-volatile stablecoin. Previously in another interview, Druckenmiller summarized his views of bitcoin;

“You see what is going on with bitcoin. I don’t own any. Obviously, as a trader, I should … but I only trade what I know. … Bitcoin is like anything else. It’s worth what people are willing to pay for it. … That’s what it is worth. … What I do know about bitcoin is, the concept it could ever be a medium of exchange has been eliminated because you can’t do transactions, particularly retail transactions, with this kind of volatility”.

Apart from Druckenmiller, Bleakley’s chief investment officer, Peter Boockvar, also showed his consent towards bitcoin. In an interview, Boockvar showed that he was a little bit flexible in accepting the potential of bitcoin as compared to Druckenmiller. While denying bitcoin investments completely, he admitted that bitcoin portrayed the sentiment of the overall market quite accurately. According to Boockvar, bitcoin is very useful as an indicator to estimate or judge the health of the overall market. On this utility provided by the world’s first cryptocurrency, Boockvar elaborated:

I watch bitcoin as a signal, as an indicator, not because I want to own it as I’d rather own gold as an alternative currency.

He explained the behavior of bitcoin to be detrimental for gold as if there was a correlation between these two assets. He has repeatedly disapproved bitcoin and its potential over any other asset but even then he emphasized on bitcoin to act as a tip-off for all investors. His exact words were:

I watch bitcoin as a signal, as an indicator, not because I want to own it as I’d rather own gold as an alternative currency.

This is not the first time for any billionaire or influential to bash bitcoin explicitly. Actually, Druckenmiller joins the long list of wealthy people where the greats like Warren Buffet already exist, dissenting from the potential of bitcoin.

However, as there stand several in opposition of bitcoin, there are streams of billionaires, influentials and famed personalities who are quite bullish for bitcoin. For instance, Tim Draper, a well-renowned American venture capitalist, had shown very positive sentiment for bitcoin.

In addition to suggesting countries such as Argentina to legalize bitcoin, Draper has always shown an optimistic approach to the future of bitcoin. He believes that one day, the price of bitcoin will skyrocket to $250,000 and bitcoin will account for 5% of the global share of markets.

While bitcoin is equally liked and disliked among the billionaires, we shouldn’t skip the people belonging to the billionaire group who attained status with the help of bitcoin itself. Tyler and Cameron Winklevoss, claim to possess about 1% of bitcoin, are widely known for becoming the first billionaires from a late 2017 surge in bitcoin prices.

This shows that bitcoin which is under the discussion of several billionaires is the sole reason for producing some of the members of the billionaire group. This trait that aided the Winklevoss twins is quite unique and precious because not many assets of the world are capable of making billionaires like bitcoin had already made in the past.