Jeremy Grantham isn’t exactly known for pulling punches. The billionaire co-founder of investment firm GMO went on CNBC’s Squawk Box last week and called cryptocurrency a “useless, speculative mechanism.” His prediction? It won’t crash — it’ll just slowly disappear.
“Years and years, decades and decades — it will dwindle away, I suspect,” Grantham said. “Not with a bang, but with a whimper.”
He pointed to Bitcoin’s recent performance as evidence. The largest crypto is now trading around $60,500 — that’s more than 50% below its all-time high of $126,080 set back in October. And this during a period of strong economic conditions, no less. Gold, by contrast, hit a new all-time high above $5,500 per ounce earlier this year (though it’s since pulled back to around $4,096).
“You can’t depend on it in that way,” Grantham said, referring to Bitcoin’s reliability as a store of value. “People don’t use it to make serious trades, they don’t use it to buy their dinner and pay at the supermarket.”
He did offer one backhanded compliment. Bitcoin “allows crooks to move money around without leaving a trace,” he admitted. “Brilliant at that.”
It’s not all doom and gloom from Grantham, though. He conceded that blockchain technology itself could play a meaningful role in finance going forward — he just doesn’t think Bitcoin and other cryptocurrencies are the way that happens.
Bitcoin is down about 17% over the past month. Grantham isn’t the only billionaire losing faith either. Mark Cuban recently said he sold most of his Bitcoin, calling it “not the hedge I expected it to be” after it underperformed gold.
