Economist claims Bitcoin is a pyramid scheme

Economist Tendayi Kapfidze has slammed Bitcoin, labelling it a pyramid scheme and claiming people only make money based on those who join after them

After a turbulent couple of years for Bitcoin, the world’s leading digital asset is still holding firm though one economist has branded the cryptocurrency a “pyramid scheme”.

Back in 2017, it exploded into meteoric levels hitting its all-time high of $20,000 before a drawn-out bear market persisted throughout much of the following year.

It then crept back up in the first months of 2019 ahead of tumbling in the latter half of the year – with it now sat just above $7,100.

Despite the volatility, the wider financial world has started to embrace cryptocurrencies with some central banks taking their first steps toward implementing their own digital assets.

However, not everyone is convinced. Particularly one naysayer – Lending Tree chief economist Tendayi Kapfidze – brandishing Bitcoin as a scam.

“It’s a pyramid scheme,” he told Yahoo Finance. “You only make money based on people who enter after you.”

Cutting deeper, he suggests it has “no utility in the real world”.

“They’ve been trying to create a utility for it for 10 years now. It’s a solution in search of a problem and it still hasn’t found a problem to solve.”

Other experts would still argue investing in cryptocurrencies is still purely speculative and can be a way to learn more about the technology.

One such enthusiast is Oliver Pursche, Bruderman asset management chief market strategist.

He revealed he owns five cryptocurrencies which he bought in equal quantities throughout late 2016 and early 2017.

“I own five… if I’m lucky, one of them will be an all-star!” he said.

“I don’t think you go into it thinking that you’re going to become a billionaire or a millionaire as a result of it. You go into it very soberly understanding that you can lose all of your principle and that this is purely speculative.

“For me, it’s also a way to get educated on it… to me, if you want to learn about it, you’ve got to own it because that’s the only way you’re going to truly educate yourself and pay attention.”

Interested in reading more Bitcoin-related news? Discover more about Bitwise reiterating its commitment to delivering a Bitcoin ETF.

 

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