Gary Shilling, a well-known investor, has recently called bitcoin a ‘black box’ and added that he won’t invest in bitcoin, the flagship cryptocurrency, as he is “very suspicious of things that are not transparent” and, as such, won’t invest in it.
During an interview with Business Insider, the financial analyst revealed he recently met with a friend who’s a venture capitalist in the US who was “very early on [in bitcoin]” and through made a lot of money.
At a cocktail party, Shilling revealed, he asked his friend to explain what bitcoin is, and that he was given an answer revolving around its underlying blockchain technology and its limit supply. When he asked the venture capitalist about “the guys behind this” he was told that no one knows exactly who’s behind the cryptocurrency.
It’s known that someone, under the Satoshi Nakamoto pseudonym, submitted the Bitcoin whitepaper to a mailing list little over 10 years ago. Who was behind the pseudonym isn’t clear, although various journalistic investigations have pointed towards various directions.
Gary Shilling gives his opinion on bitcoin, calling it a 'black box' pic.twitter.com/3jEe1pzgve— Business Insider (@businessinsider) January 4, 2019
Taking this into account, Shilling compared the cryptocurrency ecosystem to the South Sea bubble – one of history’s biggest bubbles created by false claims. He noted a book written by Charles MacKay describing the bubble reveals someone put an ad on a paper at the claiming it was a “great discovery” and a “wonderful investment” but didn’t add any details.
Shilling went on to describe an exit scam, as the person behind the ad grabbed everyone else’s money and left to “never be heard of again.” Using this story, the investor added:
I’m just very suspicious of things that are not transparent. If I can’t understand it I don’t want to invest in it.
The investor’s words notably come after bitcoin and the cryptocurrency ecosystem endured a year-long bearish trend, that saw BTC drop from a near $20,000 all-time high to about $3,900 at press time. The MVIS CryptoCompare Digital Assets 100 Index, a market cap-weighted index that tracks the 100 largest cryptos, notably dropped 84.6% in the last 12 months.
As for what’s I store for the future, not all analysts are bearish. As covered, Chinese analysts have recently argued BTC may not yet make a comeback this year, although they expect it to get back on track in “3 to 5 years.”
Juan M. Villaverde, a crypto-focused econometrician and mathematician at Weiss Cryptocurrency Ratings, has recently forecasted that although 2018 was a “disaster” for cryptocurrency prices, it was also a year of “major progress.” Per his words, BTC will again “rise up and head for new all-time highs.”