Anthovny Pompliano, founder and partner at Morgan Creek Digital Assets, talked with Shark Tank’s Kevin O’Leary about the latest surge in cryptocurrencies amid a market sell-off. Pompliano is known to be a huge bitcoin prophet but it seems he couldn’t convince a founder of SoftKey, a company estimated to have an annual revenue of $29 million that Bitcoin is something worth investing to.
During the interview with CNBC, O’Leary claimed that bitcoin is a useless currency, since people accepting it want to hedge against its volatility. O’Leary noted that he tried to use bitcoin in Switzerland for a real estate transaction once, which led him to his negative views on the currency.
First, he went on calling Bitcoin useless and people who were accepting it, just want to hedge against its volatility. He said that once he wanted to use bitcoin in Switzerland for a real estate transaction and it led him to his negative views on the coin.
“But everyone says, yes, you can. But, what happens is the receiver wants some guarantee. Let’s say you want to buy a piece of real estate for $10 million in Switzerland. They want a guarantee that the value comes back to you as currency at ten, you have to somehow hedge the risk of bitcoin. That means it’s not a real currency.”
Putting Money in Bitcoin Is Totally BS
O’Leary added that he now is exploring the idea of this new surge being nothing more than raw speculation saying:
“It is no different to going to Las Vegas and put the money on black or red on roulette wheel.”
He also asked where is the intrinsic value inherit in deploying real capital and putting it into bitcoin as a storage of the value?
“Why this, which is basically a digital game (that’s how I look at it), have any intrinsic value? When people actually put money into this, they make no interest, they can’t pay their taxes with, the regulators don’t like it which is always a problem for compliance, and where’s the long term value? Just this idea, that they’re going to cut the units in halves sounds as such a scam. That’s just totally BS.”
Even though Pompliano defended it being a disruptive technology, O’Leary shouted that all of this is “BS”.
He didn’t stop at that. Obviously everything with “crypto” prefix seems like “crap” to him. Pompliano went on to explain that everything that’s new seems different.
“I’ve Lost 70 % on This Crypto Crap”
“What you have to realize, with Bitcoin specifically, that money is a belief system. US dollar, we use it because we believe in its value. Bitcoin has the value because two people who exchange it believe that it has a value. What we’re seeing is the volume. Look at people using it. That’s what ultimately matters.”
However, O’Leary asked what about other “crypto crap then saying that 18 months ago, he taught a class on Harvard where he put 100$ into Coinbase.
“I bought it all, all the crypto crap and it’s now worth $30. That’s a 70% loss on my crypto crap. I think that really sucks and I think that people should understand that todays hot digital bitcoin tomorrow could be – whatever.”
Moreover, tough most reason why Bitcoin is getting so much attention include it being best performing asset in the last decade, and that institutions are coming in because it is better store of value, more transparent and more secure, O’Leary still finds it “crap” and doesn’t believe the fact – that U.S. law enforcement claim they would love criminals to use more Bitcoin because its more traceable – it’s easier to trace criminal activity.
O’Leary finished this, for him obviously very disturbing topic with a question:
” But if it’s a real currency why can’t I pay my taxes with it?”
We could just leave it by saying that it’s known that the state of Ohio can already pay its taxes in Bitcoin for more than a half of year now and the congress is working on other state laws as well.
Kevin O’Leary says he gets gold more.
Bitcoin $BTC: +116%
Oil $USO: +33%
MLPs $AMLP: +18%
REITs $VNQ: +18%
Nasdaq 100 $QQQ: +17%
Small Caps $IWM: +14%
S&P 500 $SPY: +14%
EAFE $EFA: +9%
Commodities $DBC: +9%
High Yield $HYG: +7%
Investment Grade $LQD: +7%
EM $EEM: +5%
Bonds $AGG: +3%
Gold $GLD: +1%
— Charlie Bilello (@charliebilello) May 14, 2019
As Bloomberg’s Charlie Bilello tweeted 2019 returns for gold were 1%. Just for comparison, Bitcoin has 116%. To each, his own.