Renowned short seller Jim Chanos is the latest noted investor to rail against cryptocurrencies like bitcoin, saying investing in the volatile asset would be a disaster in the event of a catastrophe for the markets.
Chanos, a managing partner of Kynikos Associates who correctly predicted Enron’s downfall, said in an interview with Institute for New Economic Thinking that he believes the skyrocketing prices in cryptocurrencies was driven by excessive risk-taking.
“This is simply a security speculation game masquerading as a technological breakthrough in monetary policy,” Chanos said, according to the report. He called bitcoin a “libertarian fantasy” as so many of its supports hail its decentralized and anonymous nature as among its strengths in the currency market. And he said it’s wrong to believe cryptocurrencies would ever replace fiat currencies. (See also: Square Seen Rising Higher on Bitcoin, M&A.)
“And if you say, well, fiat currency is going to bring the world down, which could, of course, happen, then I say the last thing I’d want to own is bitcoin if the grid goes down,” Chanos said, adding that he would rather have food than digital currencies in a worst-case scenario.
“For those who believe it’s a store of value in the coming apocalypse, the idea is that you’re going to have to safeguard your key under a mountain with fingerprint and eye scan security while the hordes are outside your bunker trying to get in to use it—for what, I have no idea.”
Bitcoin’s Supports and Skeptics
Bitcoin, well off its mid-December peak of above $19,000, was near $7,406.69 Tuesday, continues to see a sharp divide between its critics and advocates.
Among its supporters, the Winklevoss twins, technology entrepreneurs, are reportedly the world’s first bitcoin billionaires. Twitter co-founder Jack Dorsey recently said he believes bitcoin will become the world’s only currency within a decade.
Meanwhile, PayPal founder Peter Thiel said he sees bitcoin as a fad that is rapidly fading and will decline so much that it will be rendered useless. (See also: Peter Thiel Believes Bitcoin May Be on the Outs.)