Billionaire investor and founder of the Soros Management Fund George Soros has become the latest voice to issue a sweeping condemnation of Bitcoin and cryptocurrencies. Speaking at the World Economic Forum in Davos this weekend, Soros has become the latest voice to decry cryptocurrencies – specifically Bitcoin – as a bubble.
During his address, Soros launched into a verbal condemnation of cryptocurrency flavored by remarks that further chastised internet giants Facebook and Google. Soros outlined his belief that Bitcoin’s volatility undermined its ability to serve as a store of value, outlining that:
“Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding… Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can’t be used for instance to pay wages because wages drop by 25% in a day. It’s a speculation. Based on a misunderstanding”.
Soros continued to speak more broadly on the potential of the blockchain – decrying the technology as a means for traders to avoid tax and for ‘dictators’ to establish ‘nest eggs’.
“There’s also as very innovative blockchain technology, which can be used for positive or negative purposes. Currently, it’s used mostly for tax evasion and for people and the rulers and dictatorships to build a nest egg abroad.”
Of course, the billionaire investor touched on recent news that nation-states around the world might move to adopt blockchain technology, touching on Russian president Vladimir Putin’s recent confirmation that Russia will move to regulate cryptocurrency exchanges and introduce a CryptoRuble later this year.
“So recently there was a just now a … conference where instead of discussing conditions in Russia they mainly discussed bitcoin because that’s what the rulers were interested in. So this will have a big effect on the valuation of bitcoin. Normally when you have parabolic eventually it has very sharp break but in this case as long as you have got dictatorships on the rise you will have a different ending because the rulers in those countries are going to turn to bitcoin to build their nest egg abroad. So I expect instead of an abrupt break to have a rather flat top over.
But it’s nevertheless a bubble typical which is always based on a misunderstanding like the tulip mania. But the blockchain technology can be put to positive use and we use it actually in helping migrants to communicate with their families and to keep their money safe and carry it with themselves.”
Voices in chorus
Soros’ comments have been echoed by many prominent investors in the international community. Renowned Wall Street tycoon Warren Buffet recently offered his view that cryptocurrencies merely represented a commodity bubble, while, in contrast, JPMorgan Chase CEO Jamie Dimon recently retreated from his harsh view on Bitcoin while acknowledging that blockchain technology held potential.
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