Home / Crypto Currency / Bitcoin is a ‘Dead Man Walking’, Claims Creative Planning CIO

Bitcoin is a ‘Dead Man Walking’, Claims Creative Planning CIO


bitcoin price analysis

Advertisement

Bitcoin is a “dead man walking” whose price will eventually plunge to zero. That’s the dire prediction of Peter Mallouk, the president and chief investment officer of Creative Planning Inc., a Kansas investment firm that manages $32 billion in assets.

The avowed bitcoin skeptic said BTC bulls are delusional saps who don’t realize that their golden calf is worthless. Mallouk says the current bear market is proof that the end is near.

“It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral,” Mallouk wrote in Forbes. “Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking.”

‘Bitcoin is Heading to Zero’

Mallouk said future generations will read about bitcoin in finance textbooks as a cautionary tale about the dangers of crazed zealots “desperate to make a silk purse out of a sow’s ear.”

The blowhards will be the most devastated when the sham market comes crashing down, Mallouk warned. “Unfortunately for them, the end may not be pretty when it comes,” he wrote.

Mallouk is doubling down on his assessment from November 2018, when he predicted that bitcoin’s price will drop to zero. “I think the bottom for bitcoin is zero, and that’s where it’s heading,” Mallouk told Bloomberg. “Everything about bitcoin is speculation or fraud.”

peter mallouk Creative Planning Inc
Peter Mallouk: Bitcoin is dead, but blockchain and other cryptocurrencies will survive. (YouTube screenshot)

Despite his distaste for bitcoin, Peter Mallouk underscored that blockchain is a revolutionary technology that will fundamentally change how industries do business, from traditional banking to supply chain management.

Mallouk said crypto advocates shouldn’t expect the blockchain revolution to save bitcoin, which is doomed to fail.

“Make no mistake, blockchain is the real deal,” Mallouk wrote. “But just because blockchain technology is creating a new paradigm doesn’t mean that bitcoin shares that same distinction.”

A ‘Greater Fool Theory’ Investment

Mallouk said trading or investing in bitcoin is speculative gambling, and your odds of success are much higher in Las Vegas.

He echoed the sentiments of billionaire Howard Marks, the co-founder of Oaktree Capital Management, who said bitcoin is a “greater fool theory” investment.

As CCN reported, Marks said people who buy bitcoin do so only because they want to turn a quick profit by selling their holdings to a “greater fool” than themselves.

“This is what we called when I was a kid, the ‘greater fool theory,’” Marks said. “They think someone will buy it from them at a higher price. Not because they can specify its intrinsic benefits. Not because they can judge the intrinsic value. But only because they think it’s going up.”

This is exactly how Peter Mallouk feels about bitcoin.

“If you think it’s a fun way to try to make a big score, you’ll probably have better luck throwing darts at microcap stocks,” he wrote. “But if you’re doing it purely speculatively, and you’re prepared to lose all your money, keep doing what you’re doing.”

Despite his passionate hatred for bitcoin, Mallouk believes that cryptocurrencies “will likely remain part of the financial landscape indefinitely. But there’s very little reason to believe that bitcoin will be the one that stands the test of time.”

Fundamental Flaws

Mallouk said bitcoin has serious fundamental problems that will ensure its death, including:

  1. Crypto transactions are purely speculative. “There are no real fundamentals to evaluate; bitcoin doesn’t produce any products or services, hire any employees or pay any dividends.”
  2. Regulation will eventually stifle bitcoin. “The minute bitcoin or any other cryptocurrency appears to have even the slightest chance of disrupting national monetary supply, I expect regulation to be swift and decisive.”
  3. Bitcoin won’t stand the test of time. “Other than the name recognition it carries in the market, it’s virtually indistinguishable from any of the other cryptocurrencies.”

Meanwhile, Twitter CEO Jack Dorsey (net worth: $4.6 billion) predicts that bitcoin will likely displace all other currencies to emerge as the one global currency within the next decade.

“The world ultimately will have a single currency, the Internet will have a single currency,” Dorsey said in March 2018. “I personally believe that it will be bitcoin.”

Featured image from Shutterstock.

Get Exclusive Crypto Analysis by Professional Traders and Investors on Hacked.com. Sign up now and get the first month for free. Click here.
Advertisement
Read more

Check Also

Amun’s Crypto ETP Volume Spikes: Sign Of Bitcoin Accumulation?

Just weeks ago, as Bitcoin (BTC) walked the fine line between a breakout and lower lows, Amun, a London-based fintech firm, suddenly divulged that it was slated to launch its “HODL5″ exchange-traded product (ETP) on Switzerland’s SIX exchange. Amun’s announcement instantaneously garnered attention from the bulk of the cryptosphere’s eyes and ears, with everyone and their mother discussing the”game-changing” vehicle, which put a spotlight on BTC, Ethereum (ETH), and XRP. Speaking with Financial Times regarding the product, Amun CEO and co-founder Hany Rashwan explained that the ETP would be an enticing offering for both institutional players and retail traders alike, as it would provide secure and regulatory-compliant exposure to cryptocurrencies. And with that in mind, HODL5 became the rallying cry for crypto’s bulls blinded by “hopium,” who stated that the SIX-listed instrument could catalyze a jaw-dropping reversal. Yet, upon its launch, the performance of Amun’s crypto foray was lackluster at best, dismal at worst. Interest In Switzerland Multi-Crypto ETP Surges As reported by NewsBTC, HODL5, while the most-traded ETP on SIX, saw little-to-zero interest during its first day on public markets, posting an insignificant $400,000 in volume. Such a figure was, of course, a far cry from the millions in volume that optimists were clamoring for. Many chalked up the fleeting interest to a number of factors, namely the fact that SIX has only been classified as Earth’s 13th largest stock exchange, posting a market capitalization of $1.6 trillion, a mere seven percent of the S&P 500. Industry analysts and commentators looking to find a rationale behind the lack of volume aimed their scopes at other nuances. Some attributed the HODL5’s initially scant volume to Amun’s inability to captivate the business and wallets of SIX’s institutional clients, the vehicle’s targeted constituency. Moreover, these skeptics added that such market participants didn’t believe that the crypto market was poised to reverse its multi-month downtrend. However, with a recent tweet from Su Zhu, the chief executive and investment officer at Singapore-based Three Arrows Capital, Amun’s fortunes may actually be turning for the better, despite the further decline in the Bitcoin price. On Thursday and Friday of last week, as BTC freefell to establish a year-to-date low in the $3,200 range, Switzerland’s only ETP surprisingly saw record-breaking volumes, which followed weeks of relative inactivity and mundane action. In fact, Thursday saw traders exchange 53,233 HODL5 shares, and 62,986 on the following day, which amounts to approximately $1.3 million at current prices. This, of course, was a far cry from the 27,244 shares traded throughout the product’s inaugural session. Last Thurs and Fri we broke volume records again on the Swiss HODL ETF with 53,233 shares and 62,986 shares traded respectively. That coincided with the dip in BTC to 3.2k and ETH to near 80. The correlation between volume and price continues to be very strong at (-68%). https://t.co/Meuaa9MXCV — Su Zhu (@zhusu) December 11, 2018 In a subsequent tweet, the crypto-friendly Three Arrows Capital executive explained that there is a “very strong” correlation between volume in price, whereas HODL5 trading surges amid crypto’s incessant stream of strong drawdowns. Case in point, when ETH neared $80 and BTC neared $3,200 on December 7th, SIX processed record volumes as aforementioned. Drawing conclusions from this simple fact, Zhu, a bonafide crypto commentator growing in popularity, noted that “[ETP] buyers have firm levels in mind.” Bitcoin Revisits Year-To-Date Low At $3,200 — Potential Level Of Accumulation Just a week after HODL5 experienced its best day yet, BTC, after another bout of tumult and unpredictable price action, has found itself nearing $3,200 yet again. In fact, at the time of writing, the leading cryptocurrency trades for $3,250 a pop on Coinbase Pro, the essential benchmark of crypto exchanges. If Zhu’s analysis is accurate, and assuming that HODL5’s buyers are representative of the entire trading demographic, Bitcoin could potentially find a semblance of support at current values, as investors seek to cash-in on the crypto craze for the long haul. Other reports indicate have confirmed that investors, are, in fact, scaling into cryptocurrency holdings en-masse. Extensive research recently completed by Diar, a leading crypto-centric data analytics unit, has revealed that the amount of ETH that Ethereum’s top 500 wallets have held has risen by 80% in 2018 alone. To put this growth into perspective, on January 1st, whales kept 11 million Ether under lock and key, as of November 30th, the same group of wallets held 20 million. Although conclusions cannot be drawn from this statistic, optimists have exclaimed that whales are heavily betting on a market turnaround. Still, not all pundits are entirely convinced that this nascent market has found itself at a long-term bottom. Michael Bucella of BlockTower Capital recently told CNBC’s Fast Money panel that Bitcoin has yet to undergo its last leg lower, which will mark the end of crypto’s near-year-long “distress cycle.” Related Reading: Interview: Stephen Innes Says Crypto, Bitcoin to “Grind Higher” Over Next Decade Featured Image From Shutterstock The post Amun’s Crypto ETP Volume Spikes: Sign Of Bitcoin Accumulation? appeared first on NewsBTC.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.