Author: Gan Jia Ci
Short selling expert Jim Chanos is a tenacious skeptic of Bitcoin.
Chanos, the man who predicted the Enron downfall, declared that Bitcoin was the “last thing” he would desire to have during a catastrophic crisis.
During an interview with the Institute for New Economic Thinking, he explained, “This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”
For long, many have compared Bitcoin to the likes of gold, dubbing the former a “digital gold” for its store of value and limited supply.
Chanos disputed the comparison, claiming that cryptocurrencies are the least useful in an “apocalypse” as a store of value, and that food would be more effective during the catastrophe.
“And if you say, well, fiat currency is going to bring the world down, which could, of course, happen, then I say the last thing I’d want to own is bitcoin if the grid goes down.”
Chanos founded investment corporation Kynikos Associates that implements investment strategies and is currently a lecturer on the history of financial fraud at Yale University.
He explained that while many perceive Bitcoin as a reliable currency, it is more attractive for those looking to evade the government.
“Bitcoin is still the area for people who are trying to avoid taxation or other examinations of their transactions. That’s one thing where I think it probably still has utility, but the governments have figured that out,” he stated.
Chanos also paralleled the recent hype surrounding cryptocurrencies to a “fraud cycle”. With more gains over a long duration, people grow less cautious of their past pitfalls and start diving into investments that would typically be too good to be true.
“We’re now nine years into this bull market, same as the ‘90s, so I suspect that now things are starting to percolate,” he spoke of ICOs and Bitcoin.
He continued, “This is simply a security speculation game masquerading as a technological breakthrough in monetary policy.”