BITCOIN NEWS Dean of Short Sellers: Cryptocurrency Market is Impersonating Technological Breakthrough

Renowned short seller Jim Chanos has said that cryptocurrency is masquerading as a technological breakthrough, and that Bitcoin is the last thing he’d want to own if the grid goes down.

Chanos, founder and managing partner of New York-based Kynikos Associates, was speaking with the Institute for New Economic Thinking on cryptocurrency, fraud coming from China, and why fraudsters may currently be on the rise, in an interview yesterday.

During the Q&A, Chanos explained that investors are ‘willing to take risks, willing to believe things’ the longer a financial and business cycle lasts.

“So today we’ve got bitcoin and ICOs [initial coin offerings], which went ballistic in 2017,” he added. “I suspect going forward we’re going to see more and more evidence of questionable companies as this bull market keeps advancing and aging. We’re now nine years into this bull market, same as the ‘90s, so I suspect that now things are starting to percolate. I think bitcoin and the ICOs are just one manifestation of that.”

Chanos expressed his disbelief over the hype surrounding cryptocurrencies such as Bitcoin. According to him, in the worst-case scenario, owning a digital currency as a store of value wouldn’t work very well; he believes that food would work the best.

“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,” he said. “Because for those who believe that you need to own digital currency as a store of value in the worst-case scenario, that’s exactly the case in which a digital currency will work the least. Food would work the best.”

He went on to add that if fiat currencies were to bring the world down, the last thing he’d want to own is Bitcoin if the grid went down. In his opinion, the use of a cryptocurrency is for people who are trying to avoid taxation or the examination of other transactions, and that it is ‘simply a security speculation game masquerading as a technological breakthrough in monetary policy.’