Investor Gary Shilling Is Staying Away From BTC Over Its Lack of ‘Transparency’

Francisco Memoria

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.

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.”

Circle CEO on Whether Bitcoin Is Still 'Attractive' as a Safe Haven Asset

Siamak Masnavi

Circle CEO Jeremy Allaire talked on Monday (August 19) talked about Bitcoin's recent price action and whether Bitcoin can be considered a safe haven asset.

The Circle CEO's comments during an interview on CNBC's "pre-market morning news and talk program "Squawk Box", where he was asked questions by Andrew Ross Sorkin and Joe Kernen, at a time when Bitcoin was trading at $10,702.

Sorkin started the interview by asking Allaire for an explanation of Bitcoin's price action over the past two weeks. Allaire replied:

"Clearly a non-sovereign digital asset like Bitcoin is attractive to people who are interested in moving capital into a place where they can control it themselves. That underscores a lot of interest that’s been there over time. It’s the digital gold thesis and I think a lot of both institutional accumulators of Bitcoin, individuals, very specifically individuals in jurisdictions or environments where the intense concern about capital controls are there. That’s like the underlying thesis and I think that has had an impact on it for the last 8 years."

Next, Sorkin asked Allaire if we should be thinking that money moved out of China (due to the recent political unrest in Hong Kong) into Bitcoin or whether the price of Bitcoin went up because people are speculating that the price of Bitcoin will increase in similar situations in the future. 

Allaire answered:

"Yeah, I think likely it's a mixture of both, and obviously it's not something you can clearly measure at any given time... Last week was a significant risk-off week for equities. You saw there were a lot of holders of digital assets whose broader portfolios were taking a hit and if they had gains, obviously bitcoin is up over 100% almost 200% over the past 9 months or so, that’s a place to take some gains as well. Depending on the type of holder so to speak, you’re going to see slightly different behaviors during these market moves."

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