Economist Jim Chanos: in case of total economic disaster, Bitcoin would be the worst idea
If the “grid goes down”, Bitcoin and digital currencies would not fulfill their initial goal - to be a store of value in case of mass disasters. This is what James S. "Jim" Chanos, assets manager, founder and CEO of Kynikos Associates told the press at a recent interview.
Speaking with the members of the Institute for New Economic Thinking, Mr. Chanos has made it clear that the current situation and, especially, last year were speculative and the innovation of cryptocurrencies was highly overestimated:
“This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”
Jim Chanos has correctly predicted the downfall of Enron - the large enterprise which hid its downsides until they became obvious for everyone else. He has compared the current state of cryptocurrency market to that financial scandal as well as the boom of venture market in the 1990s.
The biggest practical downside of digital currencies is indeed their digital nature, whilst gold has survived as a store of value centuries before electricity was invented. This issue has been described by other economic experts too, most notably - by Thomas Price from Morgan Stanley.
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