There is just one thing that cryptocurrency bulls love hearing more than Dennis Gartman bashing bitcoin, and that is Whitney Tilson bashing bitcoin. The reason is the same: just like Gartman, Tilson has rarely if ever been right about anything -in fact, it is almost safe to say that he has been largely wrong about everything - with the added bonuses that unlike Gartman, Tilson has blown up not one but two "hedge funds" (which really were copycats of other hedge funds).
So here is the good news: in his latest letter to... well, it's not clients as he no longer has those, so probably people who don't know they can unsubscribe from his spam mass mailings, Tilson writes: "I'm calling the top of the bitcoin/cryptocurrency madness." Naturally, the email was sent out when bitcoin was about $1,000 lower.
Here are Tilson's "arguments" for why the top of bitcoin is here... even if as he concedes, "bitcoin could go to $1 million" (how Whitney reconciles those two is anyone's guess).
I'm calling the top of the bitcoin/cryptocurrency madness
1) In the past week, I’ve been asked about bitcoin by a parade of the least-knowledgeable investors imaginable – and the only times such foolishness has happened before in my 18-year career were at the peak of the internet and housing bubbles, so I’m calling a top right now.
Blockchain technology is real in the same way that the internet was real back in 1999 and housing prices tend to go up in the mid-2000s – in other words, a good idea taken to absurd extremes is NOT a good idea!
That said, the greed and speculative nature of humans is inherently unpredictable, so for all I know bitcoin could go to $1 million.
But I do know the ultimate outcome: smoldering rubble, a lot of finger-pointing (where were the regulators?!), and a lot of tears and empty bank accounts, especially among those who can least afford it.
I don’t often quote our Malignant Narcissist in Chief, but I will here: “Sad…”
2) Trust me: run, don't walk, to watch this hilarious, clever four-minute Daily Show segment on bitcoin and other cryptocurrencies: The Rise of Bitcoin and Other Stupid Meme Currencies, https://youtu.be/nRItzSX0aCM.
Here’s the opening by Daily Show correspondent Ronny Chieng: “Cryptocurrency: is it some fake sh*t some fu*king nerds made up on the internet to steal our money, or is it the future of finance? There’s no way all these people buying cryptocurrency have any idea what the hell they’re investing in!”
Other brilliant moments:
CNBC guest: “If you imagine bitcoin as a gold coin, Ethereum is a coin that has a magic spell in it.”
- Chieng sits in a bubble bath explaining things (a scene stolen from The Big Short) (bonus: full frontal nudity – alas, the best part blurred!)
- Chieng asks Joe Luben, co-founder of Ethereum: “Why do so many suckers on the internet, excuse me, sorry I mean people, believe fake money has value?” He played it straight, answering: “Ether is real…”
- Chieng says “This is America, so I decided to create my own cryptocurrency, but that has to be an incredibly complex…” [on the screen, he goes to a web site called “Create your own Cryptocurrency” (I just Googled it and there are 1.83 million hits!)] and concludes: “I did it! It literally takes 10 minutes to go on a website and create your own coin.”
Then he tries to pay a sidewalk hotdog vendor and a taxi driver with his new Chieng-coin, and when the taxi driver throws him out of the cab, he lectures him: “Remember this moment, when you had a chance to jump on Chieng-coin and you didn’t!” – hilarious!!!
Meanwhile, bitcoin hit a new all time high of just shy of $20,000 earlier on Sunday, and just hours before the CME becomes the second US exchange to launch bitcoin futures as institutional adoption of the world's best - and most volatile - investment grows exponentially.