The avowed bitcoin skeptic said BTC bulls are delusional saps who don’t realize that their golden calf is worthless. Mallouk says the current bear market is proof that the end is near.
“It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral,” Mallouk wrote in Forbes. “Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking.”
‘Bitcoin is Heading to Zero’
Mallouk said future generations will read about bitcoin in finance textbooks as a cautionary tale about the dangers of crazed zealots “desperate to make a silk purse out of a sow’s ear.”
The blowhards will be the most devastated when the sham market comes crashing down, Mallouk warned. “Unfortunately for them, the end may not be pretty when it comes,” he wrote.
Mallouk is doubling down on his assessment from November 2018, when he predicted that bitcoin’s price will drop to zero. “I think the bottom for bitcoin is zero, and that’s where it’s heading,” Mallouk told Bloomberg. “Everything about bitcoin is speculation or fraud.”
Despite his distaste for bitcoin, Peter Mallouk underscored that blockchain is a revolutionary technology that will fundamentally change how industries do business, from traditional banking to supply chain management.
Mallouk said crypto advocates shouldn’t expect the blockchain revolution to save bitcoin, which is doomed to fail.
“Make no mistake, blockchain is the real deal,” Mallouk wrote. “But just because blockchain technology is creating a new paradigm doesn’t mean that bitcoin shares that same distinction.”
A ‘Greater Fool Theory’ Investment
Mallouk said trading or investing in bitcoin is speculative gambling, and your odds of success are much higher in Las Vegas.
He echoed the sentiments of billionaire Howard Marks, the co-founder of Oaktree Capital Management, who said bitcoin is a “greater fool theory” investment.
As CCN reported, Marks said people who buy bitcoin do so only because they want to turn a quick profit by selling their holdings to a “greater fool” than themselves.
“This is what we called when I was a kid, the ‘greater fool theory,’” Marks said. “They think someone will buy it from them at a higher price. Not because they can specify its intrinsic benefits. Not because they can judge the intrinsic value. But only because they think it’s going up.”
Bitcoin Will Prove It Never Had Any Substance, Claims Billionaire Skeptic Howard Marks https://t.co/kZwT02Wvir
— CCN (@CryptoCoinsNews) July 19, 2018
This is exactly how Peter Mallouk feels about bitcoin.
“If you think it’s a fun way to try to make a big score, you’ll probably have better luck throwing darts at microcap stocks,” he wrote. “But if you’re doing it purely speculatively, and you’re prepared to lose all your money, keep doing what you’re doing.”
Despite his passionate hatred for bitcoin, Mallouk believes that cryptocurrencies “will likely remain part of the financial landscape indefinitely. But there’s very little reason to believe that bitcoin will be the one that stands the test of time.”
Mallouk said bitcoin has serious fundamental problems that will ensure its death, including:
- Crypto transactions are purely speculative. “There are no real fundamentals to evaluate; bitcoin doesn’t produce any products or services, hire any employees or pay any dividends.”
- Regulation will eventually stifle bitcoin. “The minute bitcoin or any other cryptocurrency appears to have even the slightest chance of disrupting national monetary supply, I expect regulation to be swift and decisive.”
- Bitcoin won’t stand the test of time. “Other than the name recognition it carries in the market, it’s virtually indistinguishable from any of the other cryptocurrencies.”
Meanwhile, Twitter CEO Jack Dorsey (net worth: $4.6 billion) predicts that bitcoin will likely displace all other currencies to emerge as the one global currency within the next decade.
“The world ultimately will have a single currency, the Internet will have a single currency,” Dorsey said in March 2018. “I personally believe that it will be bitcoin.”