Famed financial analyst Gary Shilling has recently revealed his firm, A. Gary Shilling & Company, is shorting bitcoin as he believes it’s “some kind of a grand Ponzi scheme,” that he claims doesn’t have the characteristics needed to be a currency.
According to CNBC, Shilling implied bitcoin isn’t trustworthy as he argued the identity of the flagship cryptocurrency’s creator, Satoshi Nakamoto, has never been disclosed, and asked “where is it written in stone” that BTC’s amount if set to 21 million.
He then mentioned bitcoin’s energy consumption. As CryptoGlobe reported, some have estimated the cryptocurrency’s network consumes approximately 73.1 TWh of power a year, as miners have to spend resources to secure it. He added:
We [A. Gary Shilling & Company] looked at this and said: ‘let’s look at bitcoin compared to the requirements of a currency.’ It really doesn’t have – a currency has to have a store of value.
The famed analyst noted that bitcoin’s volatility doesn’t make it a good store of value. Notably, before this week’s large sell-off, the cryptocurrency was less volatile than the stock market. Its volatility index had, in fact, reached levels it hadn’t seen since December of 2016.
It also has to be a medium of exchange. Shilling noted that “if you want to get to the head of the line in bitcoin trading you have to pay up.” The last requirement for it to be a currency would be to be universally accepted, which the analyst claims it isn’t.
He added:
All the requirements you normally have to have for a currency, it just doesn’t have. The only legitimate use I can think of in bitcoin is off the books kinds of transactions, underworld transactions and so on and so forth.
With the “ease of transferring money around the world today,” Shilling said, he doesn’t see any legitimate use for the flagship cryptocurrency, which in his eyes is a “game.” The analyst’s short on bitcoin may have likely paid off in the last few days, as the cryptocurrency lost over 12% of its value on Wednesday, November 14.
In the last 24-hour period, however, it seems to be recovering as according to CryptoCompare data it’s up 2.17%. Bitcoin is currently trading at about $5,595.
Notably, last year Gary Shilling called bitcoin a black box and revealed he wouldn’t invest in something he, per his words, couldn’t understand. At the time he claimed to be “very suspicious” of things that “are not transparent.”
