Famous Former Bitcoin Critics Who Conceded In 2020
Publicly recanted! Luminaries who came to terms with crypto in 2020. Famous Former Bitcoin Critics Who Conceded In 2020
Bitcoin may never be a widely used medium of exchange, but it has become a useful store of value, former critics concede in 2020.
Humans, being only human, tend to hang on to their cherished beliefs — even in the face of overwhelming contradiction. That’s why recantations — that is, public acts of refuting a previously held opinion — are so rare. This year, however, has presented several notable changes of heart where Bitcoin (BTC) and other cryptocurrencies were concerned — abetted, perhaps, by BTC’s climb to record price levels. Here are eight of the year’s more memorable turnarounds.
Nouriel Roubini, Economist
Crypto’s most ferocious critic recanted in 2020. Roubini, an NYU professor of economics who gained fame by predicting the 2007–2009 housing bubble, has in recent years heaped scorn on cryptocurrencies and blockchain technology in general.
What he said in 2018: Part of Roubini’s testimony for the United States Senate went viral: “Crypto is the mother of all scams and (now busted) bubbles.” He also called blockchain “the most over-hyped technology ever, no better than a spreadsheet/database” — and this was just the title of his testimony.
In his Senate visit, Roubini compared Bitcoin “to other famous historical bubbles and scams — like Tulip-mania, the Mississippi Bubble, the South Sea Bubble.” He noted that Bitcoin’s price increases had been two or three times larger than that of previous bubbles, followed by “ensuing collapse and bust as fast and furious and deeper.” At the time, Bitcoin was somewhat in the doldrums, selling at about $6,300.
What he said recently: In a Nov. 6, 2020 interview, Roublini admitted that Bitcoin — selling at about $15,500 at the time — might qualify as a “partial store of value,” primarily because of its algorithm that limits supply to 21 million BTC. Of course, Roubini also declared that Bitcoin “is not scalable, it’s not secure, it’s not decentralized, it’s not a currency,” and that it would be made irrelevant or “crowded out” within three years by central bank digital currencies.
Still, everything is relative. The professor’s partial pullback prompted economic historian Niall Ferguson to comment: “If I were as fond of hyperbole as he [Roubini] is, I would call this the biggest conversion since St. Paul.”
Biden And Yellen Will Crack Down On Crypto ‘Criminal Cesspool’ — Nouriel Roubini
In his latest ill-fated tweet, “Dr. Doom” Roubini spells out the death of cryptocurrency again, just as XRP gains 35% and Bitcoin aims for new all-time highs.
Bitcoin (BTC) naysayer Nouriel Roubini believes that incoming U.S. president Joe Biden will go much further than Donald Trump in controlling cryptocurrency.
In a fiery Twitter debate on Dec. 24, Roubini, who is known for both his dislike of crypto and his ability to call market bottoms by mistake, called the sector a “cesspool.”
Roubini to pro-Bitcoin lawyer: “You are delusional”
Roubini was responding to Jake Chervinsky, a lawyer studying the fallout from the recent news that U.S. lawmakers were demanding that stablecoin payments implement on-chain Anti-Money Laundering and Know-Your-Customer (AML/KYC) identification processes.
Chervinsky argued that the idea currently had “exactly zero chance” of becoming an enforceable law. Rather, it represented the “personal views” of Steven Mnuchin, the Treasury Secretary under Trump soon to be replaced by Biden’s pick, Janet Yellen.
“You are delusional,” a visibly irate Roubini retorted.
“Biden’s team, starting with Yellen who was my boss at CEA, will crack down on this criminal tax evading & AML-KYC-TFC-evading crypto/shitcoins cesspool much more than Mnuchin. Get a life as you have become a crypto hired gun cheerleader/enabler.”
Bitcoin and altcoins refuse to die this year
Cryptocurrency skeptics have been buoyed this week by news that U.S. regulator the Securities and Exchange Commission (SEC) had decided to file a lawsuit against blockchain payments network Ripple. The largest investor in the fourth-largest cryptocurrency, XRP, Ripple saw a 60% drop in the value of the token once the news became public.
At the same time, commentators noted that Bitcoin had barely reacted to the legal challenge. In the long term, however, surveys have shown that many remain concerned about the potential for government bans to impact Bitcoin’s success.
Proponents argue that this is impossible. The most effective way of reducing demand for a fully-decentralized asset, they claim, is for governments to reintroduce free markets on a sound monetary standard such as gold — an unlikely eventuality.
“Bitcoin can’t be easily banned,” Saifedean Ammous, author of “The Bitcoin Standard,” summarized last year.
“If people want to use it, they’ll find a way. If you want to stop it, you want to undermine the incentive to use it. Nothing would do that like a free market in banking based on a gold standard.”
Meanwhile, the outlook for Roubini if he continues his current lambasting of Bitcoin and altcoins looks bleak. As data shows, his outbursts have almost exactly matched local price lows for BTC/USD, making the economist an accidental bellwether for those looking to enter the market to profit.
Fellow detractor Peter Schiff has a similar track record when it comes to Bitcoin itself.
Stanley Druckenmiller, Investor
Investor and hedge fund manager Stanley Druckenmiller — the man who “broke the Bank of England” along with George Soros in 1992 by betting against the British pound — appeared to abandon his previous crypto skepticism in 2020.
What he said then: “I look at Bitcoin as a solution in search of a problem,” Druckenmiller told the Economic Club of New York in June 2019. “I don’t understand why we need this thing. […] I wouldn’t be short it, I wouldn’t be long it. […] I don’t understand why it’s a store of value.”
What he says now: In November 2020, worried about the United States Federal Reserve’s Covid-related stimulus efforts, Druckenmiller told CNBC that he now likes Bitcoin as a hedge against inflation, perhaps even more than gold:
“It has a lot of attraction as a store of value both to Millennials and the new West Coast money. […] It’s been around for 13 years and with each passing day it picks up more of its stabilization as a brand. […] Frankly, if the gold bet works, the Bitcoin bet will probably work better because it’s thinner, more illiquid and has a lot more beta to it.”
Larry Fink, CEO of BlackRock
More institutional investors began to notice crypto in 2020. Larry Fink, CEO of BlackRock, the world’s largest asset manager, told the Council on Foreign Relations in December regarding Bitcoin: “Many people are fascinated about it, many people are excited about it.” His remarks came less than two weeks after Rick Rieder, BlackRock’s chief investment officer of fixed income, told CNBC that “Bitcoin is here to stay. […] Bitcoin will take the place of gold to a large extent.”
What he said in 2017: Speaking at a meeting of the Institute of International Finance shortly after BTC reached its all-time high above $5,800 in October 2017, Fink said: “Bitcoin just shows you how much demand for money laundering there is in the world. […] That’s all it is. It’s an index of money laundering.”
What he says now: In his dialog at the Council of Foreign Relations, Fink said, “We look at it as something that’s real,” adding that among three topics discussed recently on BlackRock’s website — COVID-19, monetary policy and Bitcoin — the hits for each topic were 3,000 on COVID, 3,000 on monetary policy, and 600,000 on Bitcoin. “What that tells you is that Bitcoin has caught the attention and the imagination of many people,” said Fink, adding that BTC was still untested and comprised a very small slice of overall asset markets.
Niall Ferguson, Economic Historian
Ferguson, senior fellow at the Hoover Institution at Stanford University, is one of the world’s best-known economic historians. Author of The Ascent of Money, he has been weighing in on crypto as far back as 2014 — and not always favorably.
What he said in 2014: Digital currencies are a “complete delusion.”
What he says now: “Bitcoin and China are winning the COVID-19 monetary revolution.” That, at least, was the headline he wrote in an opinion piece for Bloomberg in late 2020, which had as a subheading: “The virtual currency is scarce, sovereign and a great place for the rich to store their wealth.”
To be fair, Ferguson backpedaled on his “Crypto is a delusion” remark in early 2019, and even joined a blockchain project, Ampleforth, that year. However, his recent screed suggests he has gone even further now — reconstituting himself as a fully fledged Bitcoin bull. “Bitcoin is gradually being adopted not so much as a means of payment but as a store of value,” he wrote.
Two features were particularly attractive, in Ferguson’s view: Bitcoin’s limited supply (“Built-in scarcity in a virtual world characterized by boundless abundance”) and its sovereignty (“users can pay without going through intermediaries such as banks. They can transact without needing governments to enforce settlement”).
Jim Cramer, Financial Media Pundit
When Bitcoin went on a tear back in December 2017, CNBC’s Jim Cramer was unimpressed. “Bitcoin’s not going to replace gold anytime soon,” he assured viewers. Three years later, Cramer has recalibrated. Maybe he was living too much in the past, he confided to Anthony Pompliano in a Sept. 15 podcast: “I have to start recognizing that maybe I am using a typewriter.”
What he said: “Sooner or later, this thing [Bitcoin] is going to run out of steam,” Cramer predicted in a 2017 Mad Money segment titled, “Is Bitcoin the New Gold Alternative?” outlining five reasons he was suspicious of BTC: 1) No one knows who invented it; 2) No one knows how much the creator(s) kept for themselves; 3) The network lacks transparency; 4) It has no government support; and 5) It is based on nothing but software, which can be hacked.
What he says now: “It’s perfectly logical to add crypto to the [inflation hedge] menu,” along with real estate, art masterpieces and gold, Cramer told Pompliano while voicing his concerns about recent COVID-related stimulus activity that might be inflating the United States dollar. What Cramer liked about Bitcoin “is the scarcity of it. […] My kids when they get my inheritance won’t feel comfortable with gold [but they] will feel comfortable with crypto.”
Dan Schulman, CEO of PayPal
In late October, PayPal Holdings Inc. announced that it would allow users to buy, sell and hold Bitcoin, Ether (ETH), Bitcoin Cash (BCH) and Litecoin (LTC), as well as use these cryptocurrencies for payment at its 28 million merchants globally. This marked a new leaf for the giant payments firm and its CEO, Dan Schulman.
What he said in 2018: Crypto’s volatility “makes it unsuitable to be a real currency that retailers can accept,” Schulman told TheStreet in 2018. “I think you need to separate out the Bitcoin or cryptocurrencies as currencies and the underlying protocol called blockchain.”
What he says now: “There’s no question that people are flocking to digital payments and digital forms of currency,” Schulman told CNBC.
So, how can Schulman’s and PayPal’s new stance be explained? In 2020, PayPal was reportedly feeling some heat from another payments firm, Square, which for several years has allowed BTC purchases through its profitable Cash App unit.
Indeed, only two weeks before PayPal’s Oct. 21 crypto announcement, Square declared that it had purchased $50 million in Bitcoin for its corporate treasury. By comparison, PayPal and Schulman had been more cautious regarding cryptocurrencies.
With the COVID crisis, however, the use of cash has “declined precipitously — something like 40–70%,” the PayPal CEO told Squawk Box co-anchor Andrew Ross Sorkin in November. As noted, PayPal will allow customers to use crypto as a funding source for transactions in any of its merchant sites as of early 2021, but the firm will first convert the crypto into fiat currency before paying retailers.
PayPal, not retailers, in other words, will be assuming the crypto’s price volatility risk.
Izabella Kaminska, Financial Journalist
On the matter of Bitcoin, “financial journalists, too, are capitulating,” noted Ferguson. In late November, “the Financial Times’s Izabella Kaminska, a long-time cryptocurrency skeptic, conceded that Bitcoin had a valid use-case as a hedge against a dystopian future.”
What she said in 2016: Writing in the Financial Times, which she joined in 2008 and for which she is the editor of FT Alphaville, Kaminska declared: “What is clear is that thus far the technology which was supposed to be revolutionizing finance and making it more secure (oddly, by skirting regulations) is looking awfully like the old technology which ran the system into the ground.”
What she says now: “Was all the trouble of creating it [Bitcoin] really worth while? Surprisingly, for a long-term critic, I’m going to say yes,” Kaminska wrote in a Nov. 24, 2020 FT piece.
What changed? Not Kaminska’s fundamental view of the cryptocurrency, at least. BTC remains “an intrinsically volatile and inelastic form of money” and is unlikely to ever become a widely used form of currency. “Yet there is one scenario that changes everything: a world in which no government is prepared to stand up for true civil liberties or free enterprise,” she wrote.
Such a scenario seemed far-fetched only a year ago, but with the COVID-19 crisis, it’s now at least imaginable. For a future “in which the world slips towards authoritarianism and civil liberties cannot be taken for granted […] Bitcoin’s anonymous security acts as a hedge against the worst of dystopian realities” — that is, as a sort of doomsday contingency system — and for that, “I am glad someone created Bitcoin.”
Ray Dalio, Hedge Fund Founder
Ray Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund. Dalio surprised Reddit users recently when he acknowledged that over the past 10 years, Bitcoin and some other cryptocurrencies “have established themselves as interesting gold-like asset alternatives.” Until recently, Dalio was regarded as a staunch crypto skeptic.
What he said in 2017: “Bitcoin is a bubble,” Dalio told CNBC. He claimed the token’s volatility makes it a poor store of value, and a holder would be hard-pressed to spend it anywhere. “Bitcoin is a highly speculative market.”
What he says now: In his Dec. 8 Reddit “Ask Me Anything” session, Dalio opined that Bitcoin might now serve effectively as a “diversifier to gold,” given BTC’s limited supply and its mobility — unlike real estate, for example. Like some other investors who have reversed their positions on crypto recently, Dalio was worried about the “depreciating value of money” in the post-pandemic global economy.
Gaining Traction As A Store Of Value
Indeed, if there is one thread running 2020’s recantations, it’s fear of inflation in the wake of economic stimulus measures taken by governments to avoid post-COVID economic collapse. Bitcoin may or may never become a useful medium of exchange, but it has clearly gained traction as a store of value, as its former critics now concede.
Cat Got Your Tongue? Bitcoin Critics Wither In 2020
Why have Bitcoin critics been so silent in 2020?
Bitcoin (BTC) has had an interesting year, recovering from major sell-offs to eventually skyrocket to new all-time highs.
However, Bitcoin’s performance and cryptocurrencies increased adoption worldwide have still failed to bring some observers into the crypto camp.
Yet compared to other bull run years like 2017, 2020 has seen much less crypto criticism, with a number of Bitcoin naysayers appearing to have somewhat softened their stance towards digital assets.
As we look back on crypto in 2020, Cointelegraph has noted some of cryptocurrency’s biggest critics.
“Bitcoin Has No Future”: Russian Politician Anatoly Aksakov
Date Of Quote: Oct. 23, 2020
Bitcoin Price That Day: $12,900
Anatoly Aksakov, a member of the Russian State Duma and a major representative of Russia’s crypto-related legislation efforts, was a noteworthy cryptocurrency critic in 2020.
The official is confident that the global adoption of payments in crypto like Bitcoin would result in a “destruction of a financial system.” In October 2020, Aksakov predicted that decentralized cryptocurrencies like Bitcoin have no future, arguing that central bank digital currencies, or CBDCs, are the future of the financial system.
While it remains to be seen what comes of Aksakov’s prediction about Bitcoin, some of his previous comments show that he isn’t exactly a prophet. In a May 2020 live stream talk with Maria Butina, Aksakov said that crypto mining “is becoming a thing of the past” due to Bitcoin’s third halving cutting the miner block reward from 12.5 BTC to 6.25 BTC.
“[Crypto mining] is not profitable anymore, and as far as I understand, this business is poised to disappear in future,” Aksakov argued. Despite this doom prediction, Bitcoin miners have come into some money over the course of 2020, with Bitcoin miner revenue surging to pre-halving levels as of early November.
In keeping with Russian authorities’ constant game of ping pong in regulating crypto, Aksakov regularly changes his stance on the industry. In early December, Aksakov called cryptocurrencies a “highly profitable business,” and stressed the need to legitimize it by recognizing crypto as property.
A member of Russia’s State Duma, Aksakov is also chairman of the National Banking Council at Russia’s central bank. In mid-October 2020, the Bank of Russia officially released its plans on the development of Russia’s CBDC, the digital ruble.
“Nothing Is Priced In Bitcoin Or Any Other Cryptocurrency”: Nouriel Roubini
Date Of Quote: Nov. 7, 2020
Bitcoin Price That Day: $14,900
Nouriel Roubini, a professor of economics at New York University’s Stern School of Business, is one of the world’s biggest crypto critics, often referred to as “Dr. Doom” in the crypto community.
Known for his claims that “cryptocurrency as a technology has absolutely no basis for success,” the award-winning economist has stayed firmly critical of crypto and Bitcoin in 2020 despite admitting that BTC “maybe is a partial store of value” in late 2019.
On Nov. 7, 2020, Roubini argued that cryptocurrency itself is a “misnomer,” because a currency needs to provide a unit of account. Roubini continued to bash Bitcoin, criticizing its apparent limited scalability:
“Nothing is priced in Bitcoin or any other cryptocurrency. You have to be a single numerator, and with so many tokens, you don’t have a single numerator. You have to be a scalable means of payment, and with Bitcoin, you can make only five transactions per seconds.”
At the same time, Roubini admitted Bitcoin’s potential function as a store of value. “It’s maybe a partial store of value, because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of Bitcoin raises over time,” Roubini noted.
Bitcoin Is “The Biggest Bubble I’ve Seen”: Peter Schiff
Date Of Quote: Oct. 28, 2020
Bitcoin Price That Day: $13,200
Peter Schiff, a millionaire broker and CEO at Euro Pacific Capital, is another famous Bitcoin naysayer, criticizing Bitcoin as early as 2013. Also referred to as a “gold bug” in the crypto community, Schiff is also one of the world’s biggest proponents of gold investment.
Over the course of 2020, Schiff delivered multiple negative and controversial remarks about Bitcoin, predicting that gold will moon while Bitcoin will crash in the near future.
On Oct. 28, 2020, While Gold Plunged To Yearly Lows Against Bitcoin, Schiff Argued:
“If you measure the size of asset bubbles based on the level of conviction buyers have in their trade, the Bitcoin bubble is the biggest I’ve seen. Bitcoin hodlers are more confident they’re right and sure they can’t lose than were dotcom or house buyers during those bubbles.”
On Dec. 4, Schiff said that Bitcoin’s past performance does not guarantee its future success but rather “assures its future failure.”
Despite regularly criticizing Bitcoin, Schiff has not stayed away from the world’s largest coin completely. In January 2020, Schiff claimed that he lost access to his crypto wallet, noting that having BTC “was a bad idea.”
In August 2020, the gold advocate told people on Twitter to send BTC to his 18-year-old son, Spencer Schiff. “Since so many of you Bitcoin guys are ribbing me because my son bought Bitcoin, why not really rub it in by gifting him some as a belated birthday present,” Schiff wrote.
“I Can Trade Bananas Easier As A Commodity Than I Can Trade Bitcoin”: Mark Cuban
Date Of Quote: April 24, 2020
Bitcoin Price That Day: $7,500
Mark Cuban, a billionaire investor and owner of the NBA’s Dallas Mavericks, is another major crypto sceptic, calling Bitcoin a bubble back in 2017. While admitting that crypto could be a “reliable financial instrument,” Cuban did not stop criticizing Bitcoin in 2020 over its supposed complexity.
In an April 24 interview with Morgan Creek Digital’s Anthony Pompliano, Cuban reiterated his long-running stance that Bitcoin is too complicated to use. “It’d have to be completely friction-free and understandable by everybody first, and then you can say it’s an alternative to gold as a store of value,” he said.
Cuban stated that Bitcoin is a questionable means of exchange due to its apparent lack of fungibility for goods and services without converting into fiat currencies:
“I can trade bananas easier as a commodity than I can trade Bitcoin, and I can still eat that banana before it goes bad, and get all my potassium for my workout.”
Despite his criticism of Bitcoin, Cuban still owns a tiny bit of crypto. The billionaire investor claimed to have about $130 dollars in Bitcoin as of April 2020. Back in 2017, Cuban recommended investing up to 10% in cryptocurrencies like Bitcoin.
Mark Cuban Says He’ll Run For President If BTC Hits $1M
As president of the United States, the Dallas Mavericks’ owner says he would give away Bitcoin to every citizen.
Responding to a tweet from billionaire Chamath Palihapitiya, Mark Cuban said he would run as a U.S. presidential candidate, under a specific set of circumstances.
“I’ll run if BTC gets to $1m AND we can get commitments to donate 350 BTC to the Treasury each of the 4 yrs so that we can give 1 satoshi to every citizen each yr, that they must hold for 10 years,” the Shark Tank star tweeted on Tuesday.
Cuban’s response came after Palihapitiya said the present political framework needs fixing, forecasting “a viable third political party in the US by 2030.” Cuban subsequently questioned the whole concept of political parties. In turn, Palihapitiya said the U.S. would likely not need such parties if Cuban runs for office.
Cuban has spoken about Bitcoin several times over the past two years. Some of his most recent comments include a stance on the asset as “a store of value like gold that is more religion than solution to any problem,” and that “no matter how much BTC fans want to pretend that it’s a hedge against doomsday scenarios, it is not.”
At the core, Cuban’s overall view of Bitcoin is not too far off from the industry’s outlook on the coin. Both Cuban and crypto industry gurus see the digital asset as a store of value similar to gold.
Cuban has, however, previously called for greater user simplicity for the asset, as well as touching on several other points over the years. In contrast, crypto pundits see Bitcoin solving a plethora of issues, instead of simply acting as another store of value.
Mark Cuban Says Crypto Is ‘Exactly Like The Internet Stock Bubble’
But the statement wasn’t without a few bullish predictions for Bitcoin and Ethereum.
Billionaire entrepreneur Mark Cuban says the cryptocurrency market is “exactly” like the dot-com bubble of the late-1990s and early 2000s. His statement seems to signal that digital-asset valuations may implode once investor exuberance runs out.
“Watching the cryptos trade, it’s EXACTLY like the internet stock bubble. EXACTLY,” Cuban tweeted on Monday before offering a silver lining to crypto enthusiasts.
Watching the cryptos trade, it’s EXACTLY like the internet stock bubble. EXACTLY. I think btc, eth , a few others will be analogous to those that were built during the dot-com era, survived the bubble bursting and thrived, like AMZN, EBay, and Priceline. Many won’t
— Mark Cuban (@mcuban) January 11, 2021
Although the internet bubble didn’t end well for the vast majority of dot-com stocks, several rose from the ashes to form legitimate companies, Cuban said. Amazon, eBay and Priceline immediately came to mind.
Cuban’s seemingly positive outlook on the top two cryptocurrencies came even as he dispelled all the narratives surrounding monetary debasement and fiat currency. These are “just sales pitches,” he said, arguing that crypto valuations are based only on supply and demand.
As during the dot-com bubble “the experts” try to justify whatever the pricing of the day is. Crypto , much like gold , is a supply and demand driven All the narratives about debasement, fiat, etc are just sales pitches. The biggest sales pitch is scarcity vs demand. That’s it
— Mark Cuban (@mcuban) January 11, 2021
Cuban hasn’t quite gotten his story straight on Bitcoin. He once argued that bananas are a better medium of exchange than BTC and said the digital asset will act more like a collectible than a financial instrument.
But just last month, he praised Bitcoin’s monetary policy by arguing that public companies should “commit to not issue new shares of stock” ever. He was, of course, referring to Bitcoin’s capped supply of 21 million units hardwired into the code.
Crypto assets were in the spotlight again on Monday after the total market shed over $200 billion peak-to-trough. Zooming out, the total market capitalization has appreciated fourfold over the past year, with Bitcoin recently hitting all-time highs of around $42,000.
Mark Cuban Is More Into Crypto Than He’s Previously Let On
“I still have crypto from the early days of Coinbase. I’ve never sold anything.”
The billionaire who once said he prefers bananas to Bitcoin is now tossing around crypto terms on social media like an experienced HODLer.
In Twitter threads that were likely precipitated by his recent comments comparing crypto to the internet stock bubble of the late 1990s, Mark Cuban interacted with several high-profile crypto figures including Gemini co-founder Tyler Winklevoss, Gokhshtein Media founder David Gokhshtein, Tron CEO Justin Sun and others. The Dallas Mavericks owner discussed the issues surrounding supply and demand, the costs of moving crypto, and decentralized finance, or DeFi.
Just remember WITH DeFi, as with all derivatives, the RISK NEVER LEAVES THE SYSTEM. One segment collapses, they all face risk of collapse. https://t.co/47DsVwIJTF
— Mark Cuban (@mcuban) January 12, 2021
He debated Winklevoss over the nature of Bitcoin (BTC) and Ether (ETH), with the Gemini co-founder referring to the cryptocurrencies as networks, not assets like stocks. Cuban argued that the digital assets “trade more based off the narratives of sellers and supply and demand than any intrinsic value” and require users to convert the tokens to fiat to realize that value.
You are making my point. Supply and Demand is the ONLY thing that values BTC. As far as balance sheets and debasement, we disagree. One of the challenges of sovereign BSs is valuing IP, intangibles and cost based assets. But maybe you can tell me why inflation is minimal ? https://t.co/3ujTVFhlSx
— Mark Cuban (@mcuban) January 12, 2021
“My only mistake on Bitcoin in particular was underestimating your ability,” said Cuban, referring to Winklevoss. “You get credit for this, to create a narrative and generate demand for it. You are the King of Get Long and Get Loud for BTC and that’s not a bad thing.”
In addition, the Mavericks owner admitted to HODLing some crypto “from the early days of Coinbase,” seemingly around 2012 when the exchange was founded. This statement is somewhat at odds with one he made in 2019 after the Mavericks offered basketball fans the opportunity to pay for merchandise and tickets in BTC. At the time, Cuban estimated that the sales brought in $130, saying that was “all of the Bitcoin” he owned.
I don’t think people realize I try to test and use all this stuff and have for years. I still have crypto from the early days of coinbase. I’ve never sold anything
— Mark Cuban (@mcuban) January 12, 2021
The billionaire has been more outspoken about crypto and blockchain this year, around the same time Bitcoin was in the middle of a price rally leading it to an all-time high of more than $42,000. Last Tuesday, Cuban said — seemingly as a joke — that he will run for president of the United States if the price of Bitcoin reaches $1 million and officials agree to distribute the crypto asset to all American citizens.
Though the price of Bitcoin is more than $35,000 at the time of publication, Cuban’s statement gives the crypto asset around three years to rise roughly 3,000%. While such a feat is theoretically possible, it is probably unlikely.
“I Don’t Think Digital Currencies Will Succeed In The Way People Hope They Would”: Ray Dalio
Date of quote: Nov. 7, 2020
Bitcoin price that day: $15,500
In a Nov. 7 interview with Yahoo Finance, Ray Dalio, American billionaire hedge fund manager and founder of Bridgewater Associates, claimed that he doesn’t see digital currencies like Bitcoin succeeding the way other people do. He also expects global authorities to “outlaw” Bitcoin if its price goes too high.
Dalio also criticized Bitcoin for not being an effective medium of exchange and a store of value, stating:
“Theoretically, Bitcoin is good, but there are three basic things: a currency has to be an effective medium of exchange, a storehold of wealth, and the governments want to control it […] I today can’t take my Bitcoin yet and buy things easily with it.”
Dalio Subsequently Admitted That He “Might Be Missing Something” About Bitcoin:
“I can’t imagine central banks, big Institutional investors, businesses or multinational companies using Bitcoin […] If I’m wrong about these things I would love to be corrected.”
Dalio has significantly softened his stance to Bitcoin, claiming that it could be a diversifier to gold on Dec. 8. The hedge fund veteran previously called the top cryptocurrency a bubble back in 2017.
Less People Criticized Bitcoin And Crypto In 2020
Despite a select number of well-known critics bashing Bitcoin in 2020, it appears that the seminal cryptocurrency has drawn less public skepticism than in previous years.
Prominent naysayers like Warren Buffett, Bill Gates and Donald Trump have largely remained silent about Bitcoin and crypto this year. Nobel Prize winning economist Paul Krugman, who predicted a “total collapse” of Bitcoin in 2018, refrained from commenting as well.
According to data by major Bitcoin-themed website 99bitcoins, 2020 has been the year with lowest Bitcoin “obituary” rate since 2013.
Only seven cases of “Bitcoin death” were reported in media monitored by 99bitcoins, compared to 41 “obituaries” in 2019, and 93 in 2018.
The biggest year for Bitcoin deaths was 2017, the last year in which Bitcoin saw a major bull run before 2020.
Whether one looks at Bitcoin’s withering critics, the growing interest of major banks and financial institutions in cryptocurrency, or the meteoric bull run this year, one thing seems clear: crypto is here to stay.
New Bitcoin Price Highs Revive Old Misconceptions About BTC And Crypto
With crypto exceeding all monetary expectations in 2020, some mainstream analysts have reverted to long-forgotten arguments from 2017.
As anyone following the crypto industry will have noticed, yes, Bitcoin (BTC) did recently smash its previous all-time high of around $20,000. Now, many analysts anticipate the cryptocurrency to eventually rise to the mid-$30,000s or even higher within the next few years.
As things stand, BTC is trading at around $23,300, briefly testing the $24,000 mark on several occasions. However, despite all of these positive developments, many prominent individuals from the financial mainstream have spoken negatively about the crypto industry, using cliche adages — such as “crypto is for criminals” and “crypto is all hype, no substance,” etc. — to describe BTC and other prominent digital currencies.
For example, renowned economist and financial strategist David Rosenberg recently referred to Bitcoin as a “massive bubble,” propping up the argument by saying that the supply curve of Bitcoin is unknown even though some people claim to know otherwise.
Similarly, Mark Cuban, who is generally quite open-minded in regard to various futuristic technologies, also bashed Bitcoin, claiming that it is “more religion than solution.” However, he did concede that despite its shortcomings, it may be useful as a store of value.
And while crypto tech is far from perfect — admittedly being many years away from replacing legacy financial instruments such as fiat — the aforementioned opinions may seem to come across as the ramblings of annoyed traditionalists who fail to see the immense potential of the technology.
2020 Bull Run Is Different From 2017
As soon as Bitcoin broke the $20,000 mark, it was inevitable that analysts from across the board would seek to use the “this bull run is the same as 2017” argument to undermine the financial traction being gained by the industry as a whole.
In this regard, “CryptoYoda,” an independent cryptocurrency analyst, pointed out to Cointelegraph that one can see that the fearful perspective provided by the financial mainstream stems from a lack of understanding of the technology. As such, he believes that what is happening right now is a shift from debt-based fiat currency to trustless financial systems:
“What has changed? Everything. While the 2017 bull run was largely driven by early adopters and retail, this bull run is being dictated by institutional players entering the market. […] As of now, institutions buy a multiple of what is being mined per day. When one institution accumulates 500MM in BTC, it means that 500MM is no longer available for the other key players observing the market for entry.”
In a similar line of thinking, Jason Lau, chief operating officer of OKCoin, told Cointelegraph that it’s safe to say that the long-looming promise of mainstream players entering the crypto space has finally been fulfilled.
In his view, this ongoing bull run has been driven by traditional financial institutions buying Bitcoin price dips as an investment and treasury product: “They have a long term strategy for these assets. So with increased demand, HODLing, and fewer block rewards due to the recent halving, the price may have no limits.”
Additionally, another major difference between the ongoing cycle and the one witnessed before is that back in 2017, the industry was in the midst of a feverish initial coin offering craze, with the bubble duly bursting within just a few month’s time, resulting in the entire crypto economy crashing almost overnight.
According to Adam Neil, chief marketing officer of Bitrue — a digital-asset management platform — these days, people in crypto are much more pragmatic, adding: “Publicly-listed companies like MicroStrategy and PayPal have come on board, and the growth of the CME Bitcoin Futures market indicates increased demand for regulated exposure.”
Crypto Can’t, And Shouldn’t, Be Compared To Traditional Financial Mediums
It is no secret that despite its bullish outlook, a certain degree of uncertainty in regard to BTC’s value still exists, as was made clear in November when the price of the flagship cryptocurrency dipped by $3,000 within a span of just 24 hours. That being said, it is unfair to compare BTC, which is just over a decade old, to legacy systems that have been around for more than a hundred years.
So, it’s worth exploring the true meaning of the term “safe haven,” especially as the world struggles with COVID-19-induced financial destruction. CryptoYoda believes that while precious metals like gold and silver certainly are tangible stores of value, they are not very practical — i.e., they are difficult to store, transport, secure, etc. He added:
“I will always remain an advocate for precious metals as they are the ultimate stores of value and have been an accepted form of money for hundreds and thousands of years. It is difficult to store it all in Gold, and then it still needs to be protected and cannot be easily moved.”
Neil believes that while it may not be fair to compare Bitcoin to traditional stores of value, in recent times, the world’s leading cryptocurrency appears to be shouldering that expectation quite well.
In his view, the digital-gold narrative is incredibly strong within the community, with a lot of people truly believing in the technology and actively working to make Bitcoin more valuable, whether by running nodes, mining, writing and reviewing code, or HODLing it.
Additionally, it’s also important to recognize how far Bitcoin has come in relation to various legacy financial systems, with an increasing number of mainstream investors now looking to enter the domain.
Providing his insights on the matter, Yoni Assia, founder and CEO of eToro — a social trading and multiasset brokerage company — told Cointelegraph that crypto is no longer just the domain of computer programmers and fintech advocates, adding: “We expect this to continue into 2021 as fears of inflation continue to creep up globally.”
Crypto Is Not Perfect, And That’s Fine
While crypto stands to completely redefine the way in which the global financial ecosystem works, it still faces many pertinent issues that need to be ironed out. For example, over the first 10 months of 2020 alone, losses from cryptocurrency thefts, hacks and frauds amounted to a whopping $1.8 billion, according to blockchain forensics company CipherTrace.
The company even suggested that 2020 was on track to record the second-highest value in losses linked to crypto crimes, exceeding $4.5 billion.
Furthermore, due to regulatory uncertainty, crypto continues to be used by certain sections of society as a means of tax evasion.
For example, the United States Justice Department recently indicted John McAfee, an antivirus software creator and crypto proponent, accusing him of tax fraud worth millions of dollars linked to his crypto proceeds between 2014 to 2018. Furthermore, CryptoYoda believes that in its current state, the industry is far from perfect, adding:
“Scalability is a major issue. Similarly, state-level attacks pose another major risk, with such issues most likely rising as the industry grows from strength to strength. While the technology in itself is positioned well for such attacks, individuals are not. The greatest risk I see in this market is the forcing of KYC on every exchange and individual, which undermines the promise of cryptocurrency.”
That being said, fiat currencies are also used by criminals; however, in such scenarios, the “fiat is for criminals” argument is never drawn out. For example, according to a recent BBC report, HSBC allowed tech-savvy scamsters to transfer millions of dollars around the world even after it had learned of their ploy.
The leaked documents claim HSBC moved around $80 million through its U.S. business to its accounts in Hong Kong between 2013 and 2014. What’s even more surprising is that the endeavor kicked off right after the banking institution was fined a whopping $1.9 billion in the U.S. over money laundering charges.
Other reports have also suggested that banks such as JPMorgan Chase and Standard Chartered have too been implicated in moving some $2 trillion of “dirty money” between 1999 and 2017.
So, it seems that both the traditional and crypto worlds only manage to see the speck in their brother’s eye but not the log in their own.
Furthermore, since there are fewer well-known advocates for crypto in comparison with traditional finance, it’s of no surprise that the aspiring blockchain sector is losing out on the media spin war. As a result, many common misconceptions continue to seep into the consciousness of the masses, ultimately damaging the perception and delaying the adoption of the technologies.
Bitcoin’s Limited Supply Doesn’t Really Matter To One Markets Commentator
Dennis Gartman is still not convinced that Bitcoin won’t go to zero.
Bitcoin (BTC) has won over a number of mainstream financial gurus in 2020 against the backdrop of a difficult year for the United States economy. Some markets experts, such as Dennis Gartman, however, still remain skeptical of the digital asset.
Gold and Bitcoin are not really equivalent, according to Gartman’s Tuesday interview with Bloomberg. “Gold has been around for thousands of years, Bitcoin has been around for 20 years,” he said. Gartman put out a financial commentary series for 30 years, called The Gartman Letter.
Bitcoin has not been around for 20 years though. The asset’s pseudonymous creator, Satoshi Nakamoto published the written framework for Bitcoin in 2008, and the asset officially launched on the web in 2009.
“Bitcoin is the Millenials’ gold, I understand that, I get that,” Gartman said. “I will never understand Bitcoin as far as being able to buy it at $10,000, $15,000, $20,000 — I shall leave that for people who are wiser, smarter or more courageous than am I.”
As many have projected before him, Gartman believes Bitcoin’s price will eventually falter. “I fear that once, in the not-too-distant future, the monetary authorities, the various central banks around the world, are going to refuse to give up their monopoly on monetary policy and will walk in one day and Bitcoin has been rendered zero,” he said, adding:
“But can it go to $100,000 before then? John Maynard Keynes once said the market can remain illogical for longer than you or I can remain solvent, and right now seems to me to be utterly illogical.”
Gartman showed no hard feelings against Bitcoin market participants though, simply explaining that he prefers gold over the digital coin. He also mentioned Bitcoin’s limited supply and the arguments for the asset’s expected price rise as a result. “Now there’s what, 7,000 various cryptocurrencies out there,” he added, positing:
“There’s an infinite amount of finite amounts of currencies, so I think that the fun, the joy, the enthusiasm over Bitcoin and the cryptos will go the way of all flesh eventually.”
On the opposite side of Gartman’s sentiment, 2020 has hosted a growing trend of traditional financial players allocating capital to Bitcoin.
After Promoting Bitcoin Merch Discount, Mark Cuban Praises BTC Monetary Policy
The billionaire seems to have one foot in, one foot out when it comes to Bitcoin.
During a Christmas rally that has pushed the Bitcoin all time high mark ever higher, a pair of recent tweets indicate that a former critic of the digital currency is continuing to take steps towards a full-blown hodler conversion: billionaire investor and owner of the Dallas Mavericks Mark Cuban.
The Tweet came on December 23rd, when Cuban announced that fans buying Mavericks gear would receive a 25% discount when they used Bitcoin to make their purchase. Oddly enough, however, the report Cuban linked to instead said that purchasers who buy more than $150 worth of gear using Bitcoin would receive a $25 gift card, and did not mention a 25% discount:
— Mark Cuban (@mcuban) December 23, 2020
This gift card offer, as well as a wider Mavericks policy of accepting Bitcoin as payment for tickets, strikes some observers as odd given Cuban’s history of denigrating the asset. Earlier in 2020 he dusted off a zinger he first fired off in September of 2019: that he prefers bananas to Bitcoin as a commodity.
Many have described coming around to Bitcoin’s virtues as a store-of-value as a process and not an event, however, and Cuban seems to be taking the requisite steps.
In a Tweet just today, Cuban seemed to praise Bitcoin’s programmatic monetary policy, saying that publicly traded companies would be wise to restrict their share inflation:
Public companies should learn a lesson from BItcoin and commit to not issue new shares of stock. Ever. Their stock prices would immediately jump.
— Mark Cuban (@mcuban) December 27, 2020
It’s a positive comment that’s part of an ongoing, years long about-face that has landed Cuban on Cointelegraph’s list of Bitcoin critics who have withered in 2020.
Still, hodlers should be cautious about fully welcoming another member into their ranks. As he progresses in his journey towards hard money, Cuban has expressed disdain for what he believes to be “religious” zealotry among holders hoping for a doomsday scenario, and in yet another tweet this week, it’s a theme he seemed to riff on, pretending to be one of the faithful:
Blasphemous I say, just Blasphemous ! https://t.co/Jk47KqY2x6
— Mark Cuban (@mcuban) December 21, 2020
JPMorgan Predicts Bitcoin Price Could Rise Over $146,000 In Long Term
Investment banking giant JPMorgan has called a long-term bitcoin price target of over $146,000 based on the assumption that the cryptocurrency will grow in popularity as an alternative to gold, Bloomberg reports.
“A crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term,” strategists led by Nikolaos Panigirtzoglou wrote in a note on Monday. “Bitcoin’s [current] market capitalization of around $575 billion would have to rise by 4.6 times – for a theoretical bitcoin price of $146,000 – to match the total private sector investment in gold via exchange-traded funds or bars and coins.”
However, analysts argued that bitcoin’s price volatility needs to drop for institutions to make large allocations. The convergence of bitcoin and gold volatilities is a “multi-year process” and suggests that the $146,000-plus target is a long-term objective, JPMorgan noted.
Bitcoin rallied by 300% to $29,000 in 2020 and extended gains to a new record price of $34,420 in the first three days of the new year. The cryptocurrency has gained over 160% in the last three months alone, helped along by increased institutional participation.
While the crypto community expects the rally to continue, JPMorgan sees signs of “speculative mania” and believes further big gains towards the region of $50,000-$100,000 may be unsustainable in the near term.
Jamie Dimon’s Bitcoin Quotes
Dimon doesn’t want to be seen as the spokesperson for bitcoin critics. However, his comments have earned him a reputation as one of the most prominent bitcoin haters and doubters.
People have made money investing in bitcoin, but that doesn’t move JPMorgan Chase’s top executive. In fact, Dimon has warned that he would fire JPMorgan Chase traders immediately if he caught them trading bitcoin. According to Dimon, trading cryptocurrency is a stupid idea that goes against JPMorgan Chase’s rules.
Dimon called bitcoin a fraud in 2017. At the time, bitcoin’s price soared close to $20,000 from $2,000 in a space of about five months. The gains were short-lived and the cryptocurrency later crashed to about $3,000, which resulted in talks of a bitcoin bubble.
Some of Dimon’s Bitcoin Quotes Include:
- “If you’re stupid enough to buy it, you’ll pay the price for it one day,” Dimon said at the height of bitcoin’s surge in 2017.
- “It’s [bitcoin] worse than tulip bulbs. It won’t end well. Someone is going to get killed.”
- “It’s [bitcoin] just not a real thing, eventually it will be closed.” “I’m not saying go short bitcoin and sell $100,000 of bitcoin before it goes down,” Dimon stated. He went on to say that “this is not advice of what to do. My daughter bought bitcoin, it went up and now she thinks she’s a genius.”