Although bitcoin's price has continued to move upward, reaching to a new high of over $10,000 per coin earlier this week, there are still some very prominent detractors of the leading cryptocurrency. JPMorgan CEO Jamie Dimon came out against the digital coin earlier this year, and now Jack Bogle, the legendary investor and founder of Vanguard, has cautioned investors against buying up coins. Bogle spoke about the cryptocurrency at a Council on Foreign Relations event in New York earlier this week, where he told audience members to "avoid bitcoin like the plague."
"No Underlying Rate of Return"
Why was Bogle so against bitcoin, particularly considering that it has grown by almost 10 times in value so far in 2017. According to a report by Yahoo Finance, Bogle explained that "bitcoin has no underlying rate of return." He told audience members at the event that "you know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it."
Bogle continued, saying that it's "crazy" for anyone to invest in the digital asset. He suggested that "bitcoin may well go to $20,000 but that won't prove I'm wrong. When it gets back to $100, we'll talk."
Bogle, 88, launched the first index fund in 1976, revolutionizing the way that investors manage their money. He is considered one of the greatest investors alive today.
In Spite of Caution, Bitcoin Soars
Despite words of warning from individuals like Bogle, the broader investment world is increasingly interested in bitcoin. The digital currency's user and transaction base continues to grow, and more mainstream investment firms have begun to consider dealing with the currency in a more serious way. In the past several weeks, major exchanges including CME and Nasdaq have announced plans to launch bitcoin futures contracts in the coming months, allowing investors to make wagers on the price of the coin without actually having to buy up any of the tokens themselves. Beyond that, companies attempting to capitalize on the blockchain technology which supports bitcoin and other digital currencies have continued to emerge at a quick pace. Even further, bitcoin has inspired an ever-growing list of new digital currencies and tokens, many of which utilize the same basic principles and construction as bitcoin itself. However, in spite of speculation about a "flippening" in which bitcoin's share of the cryptocurrency market would be permanently overtaken, such a switch has not happened as of yet.
Bitcoin remains the largest and most popular cryptocurrency, and, as a result, its price has continued to rise, even in spite of cautions from Bogle and others.