Bitcoin (Bitcoin) is the greatest scam in the history, says Bill Harris, former CEO of Intuit and founding CEO of PayPal (NASDAQ: PYPL) and Personal Capital.
“I’m tired of saying, “Be careful, it’s speculative.” Then, “Be careful, it’s gambling.” Then, “Be careful, it’s a bubble.” Okay, I’ll say it: Bitcoin is a scam,” he writes in his article in Recode.
According to Bill Harris, Bitcoin trading is a pump-and-dump game: promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices. And the losers are ill-informed buyers caught up in the spiral of greed.
He says that dollars, pounds, euros, yen and renminbi are better means of payment, stores of value and things in themselves.
“Bitcoins are accepted almost nowhere, and some cryptocurrencies nowhere at all. Extreme price volatility also makes Bitcoin undesirable as a store of value. Besides, it only has value if people think other people will buy it for a higher price, so it has no intrinsic value,” Harris adds.
Bill Harris believes that cryptocurrency is best-suited for one use: criminal activity. Because transactions can be anonymous — law enforcement cannot easily trace who buys and sells.
“Most heavy users of Bitcoin are criminals, such as Silk Road and WannaCry ransomware. Too many Bitcoin exchanges have experienced spectacular heists, such as NiceHash and Coincheck, or outright fraud, such as Mt. Gox and Bitfunder. Way too many ICOs are scams — 418 out of the 902 ICOs in 2017 have already failed”, Bill Harris says.
Many other Bitcoin skeptics think the same way about Bitcoin, telling its role is overrated.
Billionaire investor Warren Buffett called Bitcoin a bubble and warned that coin offerings will end badly. “You can’t value Bitcoin because it’s not a value-producing asset,” Buffett said in October 2017.
Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates and Jamie Dimon, chief executive of JPMorgan Chase & Co (NYSE: JPM), called the cryptocurrency “a fraud”.
Speaking at a bank investor conference in New York, Dimon said, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
Nevertheless, not all the experts share this pessimistic outlook about world’s largest cryptocurrency.
Venture capitalist Tim Draper says Bitcoin will be bigger than his early investments Tesla (NASDAQ: TSLA), Hotmail, and Skype combined.
“Bitcoin is bigger than the Internet. It's bigger than the Iron Age, the Renaissance. It's bigger than the Industrial Revolution,” Draper declared at the Intelligence Squared US debate in New York.
He has set a $250,000 Bitcoin price target for 2022. “I’m thinking $250,000 a Bitcoin by 2022. Believe it. They’re going to think you’re crazy, but believe it. It’s happening and it’s going to be awesome!” he said to a crowd of tech enthusiasts outside Draper University.
Draper also predicts that blockchain will disrupt and transform finance, healthcare, and many other industries: “The blockchain is one of the most transformational technologies that has happened in the history of the world, and it is totally worth celebrating.”
IMF chief Christine Lagarde believes Bitcoin tools could help financial markets function more efficiently.
“There is hope that decentralized applications spurred by crypto-assets will lead to a diversification of the financial landscape, a better balance between centralized and decentralized service providers, and a financial ecosystem that is more efficient and potentially more robust in resisting threats,” she said in a blog post.
According to a recently published research cryptocurrency investors are still bullish. A Cryptocurrency Sentiment Index-Survey by Huobi Research was taken from 1,797 people stemming from 23 different countries in various regions worldwide. Huobi’s report details that 77.9% of voters believe cryptocurrencies will rise by more than 30% in the next three years. Even in the short term more than half of those polled believe that the total market value of cryptocurrencies will increase in the next month.
It is worth mentioning that recently Bitcoin price has been recovering after a dramatic decrease (more than 48%) in the first three months of 2018. It gained 10% in the last one week and was hovering above the $9,000 mark, climbing to 40-Day High Above $9200 on Tuesday.
By Jade Olafson