Steve Eisman, a particularly famous investor, stated yesterday how he thinks that cryptocurrencies are irrelevant in today’s economy, at the Chartered Financial Analyst (CFA) Institute annual conference in Hong Kong. This according to an article first published by the Wall Street Journal.
Steve Eisman is an American investor that is famous for shorting (betting against) mortgage derivatives, thus making a big profit of the subprime mortgage crisis that happened on 2007. This was explained in the movie “The Big Short”, where he was depicted by the famous actor Steve Carrell. He is now Managing Director and a Portfolio Manager for Neuberger Berman, an independent investment firm.
Steve declares that he does not understand the point of cryptocurrencies in today’s economy and reportedly stated that he would not invest in cryptocurrencies. He said:
“I DON’T SEE THE PURPOSE OF IT. WHAT VALUE DOES CRYPTOCURRENCY ACTUALLY ADD? NO ONE’S BEEN ABLE TO ANSWER THAT QUESTION FOR ME.”
Steve Eisman believes that the only two reasons why cryptocurrencies are in the spotlight right now are money laundering and speculation. Speculation has to do with thinking of cryptos as an asset class and using them as investment instruments, buying just waiting for the price to go up. And money laundering has to do with the decentralized trait of cryptocurrencies, that do not need any third party institutions (like banks) involved to process and authorize transaction and payments.
Steve also commented publicly about its next investments. He thinks that Deutsche Bank and Wells Fargo will endure problems in the near future and he is betting against their stocks on the market.
Steve Eisman joins the latest group of celebrities and investors that maintain a critical and skeptical stance on cryptocurrencies. Warren Buffett, the legendary investor, has also been very vocal against cryptocurrencies. He stated earlier this month that investing in cryptocurrencies was a gamble, and said that bitcoin was rat poison squared. Bill Gates, the Microsoft founder, also declared that bitcoin and Initial Coin Offerings were one of the most speculative and crazy things that he ever saw.