Bitcoin and other cryptos are so volatile and hard to value that buying them is closer to gambling than investing, David Rosenberg says.
Stocks are a claim on a company’s future cash flows, bonds and savings accounts pay out interest, while commodities have industrial uses and demand for them can be modeled using economic data, the Rosenberg Research president said in a morning note on Monday.
“These things are real,” Rosenberg wrote. “You want to get rich by believing in crypto ‘currencies?’ Then barbell your holdings with lottery tickets. Seriously — let’s get a grip.”
The former chief North American economist at Merrill Lynch argued that bitcoin and other tokens are examples of the “greater fool” theory at work. In other words, people buy them not because they’re intrinsically worth anything, but because they hope to sell them for a profit to someone even more foolish.