Jim Chanos: Bitcoin trapped in ‘fraud cycle’

Successful shortseller Jim Chanos has gone against Bitcoin, saying that  hype around the cryptocurrency after its price reached nearly $20,000 falls into the category of a “fraud cycle”.

“I suspect going forward we’re going to see more and more evidence of questionable companies as this bull market keeps advancing and ageing,” says the Yale University History of Financial Fraud Professor, who predicted the collapse of Enron. “This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”

He refutes the stored value argument many cryptocurrency advocates allocate to Bitcoin and altcoins, explaining that in the case of an apocalypse food would be a far better currency than cryptocoins. “In the worst case scenario, that’s exactly the case in which a digital currency will work the least. The last thing I’d want to own is Bitcoin if the grid goes down.”

Chanos concludes that the only use Bitcoin and other cryptocurrencies have today is “to avoid taxation or other examinations of transactions”, although he added that, “governments have figured that out.”

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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