Founder of Oaktree Capital Management: Digital Currencies ‘Aren’t Real’ - Bitcoin and Altcoins News

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July 27, 2017

Founder of Oaktree Capital Management: Digital Currencies ‘Aren’t Real’

Billionaire investor and founder of Oaktree Capital Management claims that digital currencies such as bitcoin ‘aren’t real.’

In a 22-page memo to Oaktree clients, Howard Mark refers to the digital currency market and ‘innovative investments,’ such as bitcoin and ethereum. However, according to Marks they are not real. So much so, that he mentions this point three times in his memo.
He writes:
I’d guess these things have arisen from the intersection of (a) doubts about financial security — including the value of national currencies — that grew out of the financial crisis and (b) the comfort felt by millennials regarding all things virtual. But they’re not real.
In his detailed report, which refers to reports from various sources, he states that people invest in bitcoin and ethereum to either use them to pay for day-to-day items or computing power, or because they don’t want to miss out on the ‘to-date profitable phenomena.’ But, he adds, ‘they’re not real.’He adds that nobody has been able to make sense of the digital currencies to him. Bottom line, he says:
You can use the imaginary currency ether to buy other new imaginary currencies, or to invest in new companies that will create other new currencies.
In Marks opinion digital currencies are nothing but a fad or a pyramid scheme that has little or no value than what people are willing to pay for it. He cites the Tulip mania in 1637, the South Sea Bubble in 1720 and the Internet Bubble between 1999-2000 as examples.
Yet, he concedes that while the digital currency market is likely to continue working while optimism is present, he questions what will happen to the price of bitcoin if people suddenly decide that they would rather hold dollars or gold.

BofA Warns Against Optimism over Bitcoin

Mark’s memo comes ahead of comments from the Bank of America, which recently warned that cryptocurrencies have risks and urged investors against optimism over them.
Francisco Blanch, Bank of America’s head of global commodities and derivatives research, said that for bitcoin to thrive it first needs to be a pledgeable collateral. He also said that the digital currency needs to be viewed as safe for it to be considered a trusted store of value.
At the time of publishing, bitcoin was trading at $2,575, according to CoinMarketCap, a near two percent rise from yesterday’s price. In recent weeks its value has fluctuated as investors’ remain hesitant over the future of the currency and the 1st August, which could see the introduction of a new digital currency, Bitcoin Cash.
Featured image from Shutterstock.

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