Head Of Fortress Recommends Investing In Bitcoin

Tyler Durden's picture

At first glance, when the CIO of Fortress Investment Group says:

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

One might think, the firm that manages $54.6 billion is advocating the end of the USD as we know it... Or is this more muppetry at work?

Via Bloomberg:

“Put a little money in Bitcoin,” Novogratz, principal and co-chief investment officer of macro funds at Fortress, said at a conference held today in New York by UBS AG’s chief investment office. “Come back in a few years and it’s going to be worth a lot.”

 

Novogratz said he sees Bitcoin growing as a payment system, especially in developing nations. Novogratz said he has put his own money in the virtual currency, without specifying how much. He has not invested in Bitcoin on behalf of Fortress, which managed $54.6 billion as of June 30.

 

“I have a nice little Bitcoin position,” Novogratz said. “Enough that I’m smiling that it doubled.”

 

However, color us a little skeptical at his advice...

Given that Bitcoin may ultimately make firms like Fortress - that rely on fiat specie - redundant, then doesn't the endorsement of Bitcoin by one of the world's largest Private Equity firms reek of the ultimate failure of BTC as a monetary construct, and seem much more to be merely an attempt by the firm to herd even more momentum chasers into a trade (ostensibly one for Novogratz P.A.) that will be then unwound with Bitcoins ultimately converted into the same dollar they are supposed to replace?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
HedgeAccordingly's picture

Just like how Greenspan nailed it with housing. ? http://hedge.ly/16453n8

CH1's picture

Far more important than "investing" in Bitcoin is USING Bitcoin.

ZerOhead's picture

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."


I already have that same strategy working for me with my Bitecoin investments. It's kind of like Bitcoin but it allows the investor to check the quality of the investments by gently biting them between your teeth. On second thought it's nothing like Bitcoin...

swmnguy's picture

I know what you mean.  Except all my bitcoins were lost in that most unfortunate boating accident.

dick cheneys ghost's picture

bitcoins are InvisIable...........you can leave them on the front porch or in the driveway and no one will steal them

on a side note, Ill bet the author  of this post is buying PM's hand over fist

swmnguy's picture

"on a side note, Ill bet the author  of this post is buying PM's hand over fist"

I have no doubt whatsoever that you are correct.

fonestar's picture

The head of Fonestar also advises investing in Bitcoin.

SGS's picture

muppetry.  LOL and you wonder why I come here 100 times a day.  for everything else, there is faggotry bitches.

auntiesocial's picture

word of the day: Muppetry. Now go and use it in your everday life. 

CPL's picture

I had been saving my BitCoins in a jar and tripped.  Glass, 1's and 0's all over the place.

Manipuflation's picture

How so?  I happen to know about boating accidents all too well and have lost many assets to the bottom of various lakes over the years but I have never figured out how to lose bitcoins due to my boating ineptitude.

BTFDemocracy's picture

Easy. Put Bitcoin wallet on Laptop, bring Laptop on boating trip.

lickspitler's picture

ZH made this up,just to observe the Pavlovian behaviour of the STACKERS. Hang on it turns out it wasn't  a whistle in  Andy Maguire's mouth.

ZerOhead's picture

Actually it's the NSA that's observing our Pavlovian behaviors... and our STACKING is keeping the global PM miners gainfully employed.

That makes us patriotic JOBMAKERS.

fockewulf190's picture

Not just the miners, but the dealers as well. FedEx and the like get their small cut of the action also.  The way things are looking, I´ll be using some of my stack to keep my own employees employed.

BenLightYear's picture

Well which one is it? I haven't logged in for quite awhile. I could no longer take this ridiculous argument. You can not have something as an investment and as a currency. It makes things tricky. Like hoarding. Don't give me the free market crap. Free market theory doesn't work so well when the masses are dumber than shit. The idea that it's an investment because one day it will be a currency is laughable at best. On that note maybe trade in your Iraqi dinars for some btc. For the record I do not dispute the integrity of the BTC system nor the mathematics behind them. It is so clearly a Pyramid scheme. I don't even take issue with it being a pyramid scheme. I take issue with it being treated as something it will never be. An long term investment or a currency.

Exponere Mendaces's picture

Love the grasping at straws in this "article". They manage billions yet they're fools? Is that the best you can do?

I know its common advice to fade a Goldman reco, but the backbending in this post is a bit ridiculous.

Nothing but the truth.'s picture

If the dollar tanks Bitcoin is the first thing the Fed/Treasury will close down.

CH1's picture

Bitcoin is the first thing the Fed/Treasury will close down

And pray tell... how might they do that?

EscapeKey's picture

*tumbleweed*

 

On a different note, I notice ZH are now against alternative currencies when it comes to BTC? But Gold is fine?

malikai's picture

Very pointed.

Very pointed indeed..

Spigot's picture

[Esc] , it's part of the psychology of the crowd. Most of the people here are still part of the herd mentality regarding BTC. I stated this a number of weeks ago on another thread. We are still in early adoption phase in terms of BTC. But maybe not for very long...

CPL's picture

It's good to spread it out you know.

Haole's picture

Many ZHers don't believe in capitalizing from much except PMs and/or doom.  ;)

F-Tipp's picture

If you want to make money trading bitcoin, that's one thing. However, in a SHTF scenario, which is the most liquid asset that preserves wealth? I have nothing against bitcoin, it's a great idea and I hope it succeeds. However, I find it is dangerous to advocate it as an alternative currency because it simply exists as data. If your internet service, or power, or hard drive, or any number of critical points fail, you're screwed.

Who am I kidding though. It's not like any government has ever shut down the internet...

Hindsight2020's picture

It is not a currency.  It's a protocol to facilitate credit transactions over the internet that can be trusted without the need of a third party.

StandardDeviant's picture

Well, to address your second point first, the fact that BTC "simply exists as data" is one of its strongest features.  You can (encrypt and) back up your BTC on a laptop, a memory stick, a cloud service, or any number of other storage devices, located in your pocket or on the other side of the world.  Much as I like the shiny stuff, it's not nearly as easy to protect.

As for the SHTF scenario, that depends on which SHTF scenario you're thinking of.  If civilization collapses all over the world, repressive gov'ts shut down all network connections everywhere, mobs chase bankers down the street with pitchforks, fire and brimstone, cats and dogs living together, etc., then no, your stack of BTC probably won't help.

On the other hand, if (as seems likely) TSHTF in a more localized way, a few BTC could be a really good thing.  If you lived in Cyprus, and had your bank account frozen and looted, or in Argentina, and woke up to find yourself subject to capital controls, you'd probably see the attraction.

And if you wanted to move your wealth from one country to another, you wouldn't have to worry about any of this nonsense about declaring currency in the excess of $10,000, or about a luggage X-ray picking up all those dense bits of metal, or about larcenous baggage handlers, or...

Urban Redneck's picture

The shiny physical stuff isn't any more difficult to "actually protect".

Even of you backup your bitcoins with pen and paper, they are only safe as long as the NSA can't break into your computer and compromise your wallet and spend your bitcoins before you realize the IRS wanted some "tribute" from you, and the rest of the bitcoin world readily and happily admits you are no longer the proud owner of said stash of bitcoins.

If the government wants to come after "you" they will. They have over two hundred years of experience in developing methods to successfully extract physical and fiat wealth from disgruntled debt serfs

The experience honing their methods at extracting digital wealth is more limited, but if SWIFT, ACHAs, Visa/Mastercard/Amex, Western Union and the MTAs, or even the Equity and Derivative Exchanges are any guide, it's a question of when the benefit of devoting resources exceeds the cost of doing so (in their not-so-humble-opinion).

The long arm of the law isn't handcuffed by the self-identified vulnerabilities of wiki post, or even the boundaries of the "digital" world.

I would grant you that if one was a "little fish" they might be more safe for the time being... but since that has to be qualified by not using Microsoft, Apple, or Android products; not using any backup "service" like Carbonite or Google; disabling a lot of web functionality that many people find important to their online "experience"; not connecting to certain networks with any computer that might house their bitcoin "data"... the list goes on, and on, and on to the point of rendering such a statement meaningless.

fockewulf190's picture

Gold is money. Bitcoin is essentially backed with the same stuff the rest of the world`s currencies are backed with.  Nichts. 

Nothing but the truth.'s picture

CH1 - By federal government order. You have clearly forgotten the confiscation of gold in Americas past.

Kirk2NCC1701's picture

Bernanke: "The enemy* of my enemy** is my friend.  I love the divide & conquer routine"

Fuck you, Ben!

 

* Extreme Gold Bugs

** Cyber-currencies

ACP's picture

Did the Twinklevoss brothers join Fortress?

Spigot's picture

Regardless of the Twinkie Bros, this is game on, my friends. Social acceptance of BTC within the main stream Financial community is progressing at warp 9. Damn it all! Couldn't they have waited a few moar months?? Shit.

AldoHux_IV's picture

all fair questions, but also could be more disinfo-- either way, the premise of being decentralized & now being claimed: China now bigger than MT Gox raises more suspicion i.e. how does a limited supply of currency remain "decentralized" & not subject to one big market player?

hmmmstrange's picture

Easiest way for China to kill the USD is drive up bitcoin to $100,000 in a month. Ben can't print bitcoin.

AldoHux_IV's picture

pre-supposing that China wants to kill the USD, what's to stop the fed/banking cartel to start buying up BTC-- like an arms race of sorts which then negates the whole concept of BTC or at the very least decentralized currency

CH1's picture

what's to stop the fed/banking cartel to start buying up BTC

WOW - that would be wealth transfer in the right direction for once!

AldoHux_IV's picture

not sure I follow-- if they can print unlimited dollars to buy BTC, why not just buy up the whole supply or any other country for that matter? How would that be a wealth transfer in the right way?

Freewheelin Franklin's picture

But they can't print unlimited dollars. And even if they did buy up all of the bitcoins, then someone could create another digital currency like Litecoin. And the Fed will have to print money to buy up all of them.

 

Hey. That's a great way fto get the Fed to destroy the dollar. 

 

 

BTFDemocracy's picture

The Fed buying up all Bitcoin implies everyone is willing to sell their coins, but limited amount are willing to sell when the price is going to the moon and beyond.  The price is set at the exchanges, by amt of willing buyers and sellers at said exchanges. Fed buy-up induced appreciation will limit sellers, liquidity will dry up and force price to the moon; Fed can't just go and buy up all Bitcoins.

Even with these flash-crashes in Bitcoin, the 'weak' hands actually believe enough in Bitcoin to hold them- by so understand the philosphy, architecture, etc., and even if they live in the moment for a quick buck, they quickly buy back into bitcoin because they don't want to be left behind when the money train leaves for $300 and beyond. Apart from the mega-bubble during spring 2013, any flash crash has rebound very quickly.

One And Only's picture

"if they can print unlimited dollars to buy BTC, why not just buy up the whole supply or any other country for that matter? How would that be a wealth transfer in the right way?"

I have BTC and if Ben wants them he's gona pay me a lot of money for them ----> wealth transfer in the right direction

But Ben isn't going to do this. If anything the government (or FED) will first inflate bitcoin buy buying a shitload of it at high prices and then dumpiing it all burning all investors on the way down and torching their confidence.

AldoHux_IV's picture

but the wealth transfer comes back via circle jerk towards dollars-- thus illusory wealth transfer-- your 2nd point I can see, but not that I'm against BTC-- just doesn't make sense.

lemonobrien's picture

i only put my money in golds and silvers... cause i'm a programer with 25 years experience (longer that internets).

XenoFrog's picture

A much wiser investment. Keep stacking and let the fools bet on the get rich quick schemes.

lickspitler's picture

XenoFrog , out from the bushes to pronounce BITCOIN dead for the 7th time. 

XenoFrog's picture

Never pronounced it dead, even now. There will always be some true believers willing to catch the knife.

Bunga Bunga's picture

Looks more like we had most knife catchers in gold and silver over the last year.

SpykerSpeed's picture

Your hands are bloody from all that gold and silver you've been catching.  ;)

XenoFrog's picture

What gold and silver? I lost all mine in a boating accident.

SpykerSpeed's picture

LOL

Well let's hope you can find it when it comes time to spend the stuff.  Assuming any businesses choose to accept gold.  Tens of thousands of businesses already accept Bitcoin.

Also, let's hope you can get your gold through the TSA checkpoints.  I hear they have a little technology called "metal detectors" nowadays.