Jack Bogle, Vanguard: avoid Bitcoin like the plague

Another Bitcoin skeptic from the traditional market, Jack Bogle, advises not to invest in Bitcoin and avoid it like a plague, bringing us, quite possibly, by far the second harshest opinion on cryptocurrency after the absolute champion among skeptics, Jamie Dimon from JPMorgan Chase, who outright called it a fraud that will blow up eventually.

John Clifton Bogle is the 88-year-old founder former leader of Vanguard, the world’s biggest investment company. His financial career involves a good scientific research during his university days and later, he created Vanguard 500 — the first ever index fund available to public. Since then, his status as a trustworthy financial expert only increased overtime.

Bogle might be right when he tells there is too much speculation on the cryptocurrency market. As described by another investor, Christopher Grey, co-founder and COO of CapLinked, “the large market fluctuations are driven by people who are using the media to manipulate the prices of various coins for quick profits both up and down, especially because nobody is regulating or watching these markets. Market manipulation that would be illegal for most other things can be done basically without risk for now in these crypto markets.”

However, Mr. Bogle’s suggestion that Bitcoin is not backed by anything but the investors’ trust is not quite true. As he himself once advised in one of his books, one should never underestimate the obvious, and the mining power consumption is the obvious factor he is not taking into consideration when talking about the price of Bitcoin. As recent reports suggest, the world’s total mining power is now bigger than the electricity consumption of some European countries, and the increasing mining algorithm difficulty will only make it more expensive to mine more BTC.

This is why the views of Jack Bogle can be viewed as the typical financial conservative’s statement, but those careful investors who are used to all consumer protection bonuses the serious financial institutions provide should better wait for the arrival of Bitcoin futures.