Jim Chanos Claims Bitcoin Fraud Cycle is ‘Speculation Masquerading as Breakthrough’

Speculation Masquerading as Breakthrough

Hedge fund mogul and Enron prophet Jim Chanos claimed that “masquerading as a technological breakthrough” in an interview with Bloomberg June 4th. Chanos claimed that in the event of a global crisis, it would be a better bet to own food or fiat.

In a speech at the Institute for New Economic Thinking, Chanos, who a year ago publicly stated that he “didn’t understand” cryptocurrencies or blockchain technology, issued further gloom and doom warnings about cryptocurrency investment.

“We’re now nine years into this bull market, same as the ’90s, so I suspect that now things are starting to percolate,” Chanos told Bloomberg in an interview. Chanos also said that the past year’s increased interest in Bitcoin part of the so-called “fraud cycle”, saying that:

“This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”

He added that if a global crisis would happen, governments would be able to step in with fiat as lenders of last resort, something he says cryptocurrency would be unable to do due to its decentralized nature.

He added:

“For those who believe that you need to own digital currency as a store of value in the worst-case scenario, that’s exactly the case in which a digital currency will work the least. The last thing I’d want to own is Bitcoin if the grid goes down.”

Chanos, who predicted the collapse of Enron, joins an increasing group of Bitcoin naysayers.

Goldman Sachs CEO Lloyd Blankfein stated in December 2017 that Bitcoin wasn’t for him, but has since relented, presiding over policies of increasing exposure to crypto.

On the other hand, Berkshire Hathaway’s CEO Warren Buffet and VP Charlie Munger retain a negative stand against crypto, with Munger comparing crypto to dealing in “freshly harvested baby brains” last month.

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