The bitcoin price has rocketed roughly 1,500% higher in 2017 to around $19,000, before correcting to the current price at $15,000. The #2 cryptocurrency by market cap, Ethereum, is up more than 5,000% year to date and many of the altcoins that we track have enjoyed similar gains. Cryptocurrencies have been one of the best-performing asset classes of all time.
So, why have so many astute investors and otherwise intelligent people been completely wrong about bitcoin? Why do they profess to know it’s future while simultaneously demonstrating their utter ignorance on the topic?
The sad truth is that everyone proclaiming bitcoin to be a doomed fraud will soon lose what remains of his or her credibility. As time goes on, and crypto continues to thrive, all those who speak ill of it will look like a joke and a half.
There are too many examples to count. For now, let us focus on five of the most prominent names in finance who have shouted from the rooftops of bitcoin’s imminent demise for all too long.
Peter Schiff
Schiff is famous for having predicted the 2008 financial crisis. He is the co-founder of Goldmoney.com, a highly respected precious metals bank that allows customers to hold wealth in physical metals vaults while still being able to transact with it like they would with fiat.
A few months ago, when BTC was sitting at $3,000, Schiff made an appearance on RT’s The Keiser Report. He claimed that bitcoin would fall to $300, that he would have been selling it at $3,000 (obviously not the best bet to have made). He later said, “Even at $4,000, it’s still a bubble”. Since then, Peter Schiff has not spoken on the topic very much. Although he did make an appearance on RT’s Boom Bust and seems to have changed his tone somewhat. He mentioned that some people are fleeing to crypto to avoid the failure of fiat, which is reasonable. But he also said that cryptocurrencies “are also fiat”. His credibility ends there, as he obviously knows nothing about how mineable coins are created.
Warren Buffet
Ah yes, the “Oracle of Omaha”. It seems Buffet has misplaced his magic crystal ball when it comes to crypto, having been wrong about bitcoin more than once. In 2014, Buffet referred to bitcoin as a “mirage” and warned investors to stay away from it. Around the same time, he made the following statement: “I’d be surprised if it were still around a year from now”. Right. Good call there, Mr. Oracle. I wonder if he will be saying the same thing next year when BTC exceeds $25,000?
Jim Cramer
This one is almost not even noteworthy, given that no one has taken this guy seriously for some time. It’s expected that he would be wrong about bitcoin. In 2008, Cramer made the following statement on his show, “Mad Money”, with his usual eccentric brand of emphatic fury:
“Don’t move your money from Bear, that’s just silly, DON’T BE SILLY!!”
One week later, Bear Stearns collapsed, and anyone who listened to him lost it all.
Cramer has said that bitcoin is “Monopoly money”, and that it’s a “pure gamble”. He has told investors they’d be better off going to Vegas. We hope no one does that.
It’s worth noting that Jim Cramer often reminds his viewers that he is ”a Goldman Sachs alum”, meaning he was once a banker, just as the next two individuals are.
Alan Greenspan & Jamie Dimon
These two are considered as one because they are of the same sub-human species: bankers. JP Morgan Chase CEO Jamie Dimon has called bitcoin a “fraud”, and former Federal Reserve Chairman Alan Greenspan has compared the current crypto rush to a currency created during the revolutionary war that eventually collapsed.
Their arguments are not even worth examining in detail. Their motivation behind trash-talking of bitcoin is clear: it threatens their very livelihood. That was one of the express intentions behind the invention of bitcoin in the first place. Satoshi Nakamoto envisioned the failure of the current global financial system following the 2008 crisis. And the market movements of 2017 show that not only was he correct, but the whole thing is accelerating much faster than anyone could have anticipated.
If you told a bookstore owner about Amazon fifteen years ago, they might have had a similar reaction. It would be reasonable for them to cry out that Amazon must be fraudulent, that it would fail, and that anyone who used it was dumber than a donkey. Seen in this light, it’s not surprising why these bankers and other bigwigs mentioned have expressed such irrational sentiments and been wrong about bitcoin.
A few notable exceptions
To be sure, there are a handful of influential people who did see the potential of bitcoin from the beginning. Bill Gates and Richard Branson made optimistic public statements many years ago in this regard. When asked the question, “do you really think a currency like this will work?” Branson simply replied:
“Well, I think it is working, and there will be other currencies like it that could work even better.”
Branson and Gates do not have the same investments (both emotional and monetary) in the current financial status quo as the aforementioned (former?) financial gurus. That’s my best guess as to why they have had a much more reasonable view on crypto as the others. They have no real reason to be blinded by their own bias. So they have not been wrong about bitcoin.
Not everyone has been wrong about bitcoin
None of the people examined earlier seem to have read the Satoshi Nakamoto white paper. They do not read articles on Coindesk or Cointelegraph very often, if ever. They have never mined coins with a simple hobby miner. And they apparently have not done any of their own research into the hows and whys of the cryptocurrency revolution (which, by the way, are all wise things to do for investors interested in bitcoin and other cryptos).
By making these outrageous claims founded in ignorance, all of these once respected and influential people will soon lose their favorable public image. The reason is simple: when you say over and over that things are a certain way, and reality proves you wrong again and again, at some point people stop listening. In the case of the crypto community and blogosphere, this already happened years ago.
All things considered, those who have been wrong about bitcoin have two options: they can either change their tone, as Peter Schiff has somewhat begun to do, or they can fall by the wayside with all their spurious arguments, fading into obscurity forever. If they were only to educate themselves, they would, of course, choose the former.
We first started recommending bitcoin around $100 and added it to the GSB portfolio under $1,000. We might not be regular guests CNBC, but we have made a fortune for our subscribers while Peter Schiff and other “financial experts” have been dead wrong about cryptocurrencies. While they missed the opportunity to get in early, we were adding not only bitcoin, but several altcoins before the herd jumped into this sector. We have experienced exponential gains and believe there is still plenty of upside ahead.
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