Steven Eisman, known for his tenure as an investor for Neuberger Berman, has expressed serious doubt over what he refers to as the “social utility of cryptocurrency,” while speaking to CNBC.
Eisman, who’s well-known for shorting the sub-prime mortgage market ahead of the 2008 financial crisis, revealed he is bearish on cryptocurrencies, he said:
“I have my doubts about it. My doubts center around the fact what's the social utility of cryptocurrency? It's good for speculation and good for money laundering. … I have no idea how to value [bitcoin] and I don't think anyone else does either.”
The speculation the famous Wall Street investor refers to, as it could be argued, can be seen by the amount of bullish statements various market analyst make when it comes to cryptocurrencies. Recently, a former JP Morgan executive claimed bitcoin will reach new highs this year.
The investor’s point of view is seemingly backed by various high-profile personalities that claim bitcoin and other cryptocurrencies are a bubble. As recently reported, Alibaba founder Jack Ma has recently claimed that while the flagship cryptocurrency is a bubble, its underlying blockchain technology isn’t.
PayPal’s CFO John Rainey has also recently stated merchants aren’t interested in cryptocurrencies right now. Cryptocurrencies have increased in popularity late last year, thanks to a surge that saw most hit a new all-time high. Bitcoin, the flagship cryptocurrency, hit a $19,200 by mid-December, but then crashed to $6,800 before recovering.
Notably, Eisman has in the past stated bitcoin has no purpose, and claimed he planned to make the cryptocurrency his next “big short.” This, as he believes one can’t properly assign the cryptocurrency fair market value, and because he doesn’t specialize in it. He was quoted as saying:
“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.”