'Bitcoin Is a Scam... a Colossal Pump-and-Dump', Says Former CEO of PayPal and Intuit

Siamak Masnavi

Bill Harris, former CEO of Intuit (1995-1999) and PayPal (1999-2000), in a post for Recode, calls Bitcoin (BTC) a scam and "a colossal pump-and-dump scheme, the likes of which the world has never seen."

In this article, Harris, who is the founder of online personal wealth management company Personal Capital, argues that "a bitcoin has no value at all" since it fails as a means of payment (very few places accept it, in addition to the problem of price volatility), it is not a good store of value (again, due to its extreme price volatility), and it lacks any intrinsic value.

He claims that the best use case scenario for cryptocurrencies is "criminal activity" since crypto transactions are harder for the authorities to investigate. He says that's why Bitcoin's heaviest users are criminals. To prove his point, he points out that crypto exchanges are not that safe, that many ICOs are scams, and that much of remote hacking involves cryptojacking.

Next, Harris explains that even the non-criminal portion of Bitcoin's users are not that innocent since most of them don't bother to report the sales of their bitcoins to the tax authorities.

He then moves on to complain about how slow and expensive it is to send someone bitcoin.

And, finally, as if all of that was not enough reason for him to dislike Bitcoin, he says that Bitcoin is "absurdly wasteful of natural resources" since the process that creates them -- mining -- is computationally expensive and requires a lot of electricity.

Institutional Crypto Lender Genesis Capital: $870M in New Loan Originations in Q3 2019

Siamak Masnavi

Institutional crypto lender Genesis Global Capital (aka "Genesis Capital"), a subsidiary of crypto-focused venture capital firm Digital Currency Group (DCG) and an affiliate of over the counter (OTC) crypto trading firm Genesis Global Trading (aka "Genesis Trading"), announced on Wednesday (October 30) that in Q3 2019 it added $870 million in new loan originations.

In its "Digital Asset Lending Snapshot" report for Q3 2019, Genesis says that it is still seeing growth in its crypto lending business, managing to add $870 million in new loan originations (for the sake of comparison, the previous record, set in Q2 2019, was $746 million). (Loan origination "is the process by which a borrower applies for a new loan, and a lender processes that application.") Since Genesis launched the crypto lending business in March 2018, its total loan originations amount to $3.1 billion.

Genesis Capital Q3 2019 Report - Fig 1.png

According to the report, just like in Q2 2019, "cash loans as the percentage of loans outstanding increased significantly" in Q3 2019; by the end of the quarter, cash loans were 31.2% of the company's active loan portfolio. Strong international demand for borrowing USD is continuing, with a large percentage of these being in the form of USD-collateralized stablecoins such as USDC and PAX. 

Genesis also says that Bitcoin remains "one of the most liquid forms of collateral available for asset-based lending." 

Featured Image and Chart Courtesy of Genesis Global Capital