Five Finance-World Celebrities Who Got It All Wrong on Bitcoin
Cryptocurrency bulls are thumping their chests now as they hum in chorus. The Bitcoin price has, for the first time, broken past the $16,000 mark, and the excitement knows no bounds.
Who could have ever imagined that a cryptic digital currency founded by the mysterious “Satoshi Nakamoto” could one day become one of the biggest investment ideas? Well, we did!
We turned bullish on Bitcoin (BTC) when it was trading for a few hundred dollars. Our Bitcoin price forecast ever since has been optimistic, or, as the bears would put it, “outlandish.” But we own up to it.
And just as our predictions have turned out to be correct—with the price of Bitcoin even surpassing our targets way earlier than we had expected—we can’t help but remind the naysayers how wrong their conjectures have turned out to be.
These Five Billionaires Got Bitcoin Wrong
Billionaire Banker Jamie Dimon
Jamie Dimon, the CEO and chairman of one of the biggest investment banks in the world, JPMorgan Chase & Co. (NYSE:JPM), has been the most vocal critic of digital currencies.
Dimon has leveled his harshest criticism at Bitcoin, calling it a “fraud” and likening it to the Dutch Tulip Mania of the 1630s. This was back in September, when Bitcoin was trading somewhere above $4,000.
Barely a month later, he lashed out at Bitcoin again.
This time he called anyone buying Bitcoin “stupid,” and said that they would eventually have to pay a price for their stupidity. At that point, the Bitcoin price had surpassed $5,800 and we found out that Dimon’s “formerly smart” daughter was also the owner of at least two bitcoins. (Source: “Jamie Dimon says if you’re ‘stupid’ enough to buy bitcoin, you’ll pay the price one day,” CNBC, October 16, 2017.)
According to Dimon, “the only value of bitcoin is what the other guy’ll pay for it.” But that’s also the case with fiat currency, isn’t it?
Just take out that currency note from your wallet and take a deep look at it. This piece of paper has value because we’ve been told so; otherwise, it is no longer backed by anything of intrinsic value, especially after we gave up the gold standard.
So, when Dimon said that he would fire his traders if they were found trading Bitcoin, he missed out on a multi-billion-dollar opportunity. Had he let them trade, they would have returned a whopping 1,400% year-to-date. Hate to say it, but his ego got the best of him.
You may ask why Dimon hates Bitcoin so much? Well, it might be because it kills his business. Fiat currency is fodder for banks, and anything that threatens to replace it supposedly puts the survival of banking institutions in jeopardy.
Investment Maestro Warren Buffett
Billionaire investment guru Warren Buffett has been much less coarse in his skepticism about Bitcoin, but nonetheless warns investors that a bubble is in the making. Back in 2014, the “Oracle of Omaha” warned investors to stay away from Bitcoin, calling it a “mirage.”
His point of contention? That Bitcoin is only a “method of transmitting money,” having no intrinsic value (just like checks or money orders), except his interpretation has turned out to be wrong. (Source: “Buffett blasts bitcoin as ‘mirage’: ‘Stay away!’” CNBC, March 14, 2014.)
Bitcoin has, in fact, become “money” itself, just as Nakamota had envisioned it.
People are already using Bitcoin to buy things of value, anything from a pizza to an “iPhone.” There are now hundreds of Bitcoin ATMs around the globe. Likewise, Bitcoin debit cards are also in circulation.
In Zimbabwe, BTC is becoming a safe-haven investment as the country runs short of dollars in the absence of a local currency. In South Africa, drivers can now pay fines in Bitcoin. In Bulgaria, a business school is offering Bitcoin scholarships.
In the U.S., we are about to see the first-of-its-kind Bitcoin Futures trading on government-regulated exchanges.
Bitcoin’s global adoption is growing with each passing day. So to rule it out as something “valueless” is fallacious.
Had Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.B) taken a leap of faith into Bitcoin, it could have delivered shareholders the quickest exponential returns never seen before in its history.
Activist Investor and Oil Bull Carl Icahn
Billionaire Carl Icahn has been wrong on more than one occasion, largely because of his energy bets. His views on Bitcoin just add to these embarrassments.
Icahn says that Bitcoin “seems like a bubble,” although he confesses that he “just doesn’t get it.” (Source: “Icahn: Bitcoin “seems like a bubble,” CNBC, December 7, 2017.)
Hmm…sounds like the mother of all ironies.
Icahn has drawn parallels between Bitcoin and the historic “Mississippi Bubble” of the 18th century. In that situation, French investors doled out money to a shell company in order to buy land in Mississippi that was believed to have gold and silver reserves. It all blew up in their faces when their investments turned out to be nothing but pieces of worthless paper.
The point? Icahn believes that Bitcoin is a bubble because people are inflating its price purely on exuberance.
Ray Dalio and Howard Marks
Two other billionaires who have expressed thoughts against Bitcoin are hedge fund manager Ray Dalio and billionaire investor Howard Marks, who have respectively called Bitcoin a “speculative bubble” and a “fad.”
They share the same concern that Bitcoin buyers are ascribing value to something that has no intrinsic value.
It’s true that the price of Bitcoin has advanced way faster than most of us had initially estimated. So the fears of a bubble are justified. But we cannot simply disregard it as “worthless.”
Bitcoin is generating value on more than just cryptocurrency exchanges. There is actual interest in the community to adopt it as an alternative currency.
Even if we see a major correction in the BTC price in the short term, price appreciation in the long run seems almost inevitable as this digital currency gradually secures worldwide government acceptance, regulatory approval ,and mass adoption.
I’m conservatively extending my Bitcoin price target to $20,000 as Bitcoin continues to give the bears a run for their money.