‘I See Bitcoin as a Dead Man Walking’, Says CIO of Top Wealth Management Firm

Siamak Masnavi

Peter Mallouk, the President and Chief Investment Officer of Kansas-Based Creative Planning, Inc., Barron’s No. 1 Independent Wealth Management Firm in America (2017) with over $36 billion in assets under management, calls Bitcoin "a dead man walking" in an article for Forbes that was published on Friday (7 December 2018).

Mallouk, who is the author of The 5 Mistakes Every Investor Makes and How to Avoid Them: Getting Investing Righthas had a very impressive career as a financial advisor. In fact, "he is the only person to have ranked No. 1 on Barron’s “Top 100 Independent Financial Advisors in America” for three consecutive years (2013-15)."

Mallouk's firm, which in the U.S. is what is known as a Registered Investment Advisor (RIA), invests "a small portion of more-aggressive investments such as high-yield bonds and micro-cap stocks, but nothing more exotic than that." He explained his appetite for risk in a Barron's article published on 15 September 2017:

“I am willing to accept investments that can bend in exchange for returns. But above all else, we are always doing our best to avoid investments that can break.”

On 15 November 2018, when Bitcoin had fallen to $5,202, Bitcoin skeptic Mallouk told Bloomberg:

"I think the bottom for Bitcoin is zero and that’s where it’s heading. Everything about Bitcoin is speculation or fraud."

In Friday's article for Forbes, Mallouk explains his distaste for Bitcoin in much greater detail. His negative negativity towards Bitcoin almost reaches the same level as Nouriel "Dr. Doom" Roubini, but unlike Roubini, Mallouk believes in the potential of blockchain technology to change "the way industries do business, from traditional banking to supply chain management," and calls it "the real deal."

Here are a few quotes from this article:

"It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral. Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking."

"For those who purchase bitcoin, there are serious headwinds that make it unlikely they will enjoy any profits over the long term. Most cryptocurrency transactions are purely speculative. There are no real fundamentals to evaluate; bitcoin doesn’t produce any products or services, hire any employees or pay any dividends."

"Some bitcoin aficionados are attracted to the idea of a currency beyond government control, one that provides a store of value that easily crosses borders around the globe, and the comfort of anonymity it can provide... But these characteristics have only persisted because governments have largely treated cryptocurrencies as novelties. The minute bitcoin or any other cryptocurrency appears to have even the slightest chance of disrupting national monetary supply, I expect regulation to be swift and decisive."

"Cryptocurrencies themselves aren’t going away, and they will likely remain part of the financial landscape indefinitely. But there’s very little reason to believe that bitcoin will be the one that stands the test of time."

 

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