"My Son Made A Lot Of Money Trading Bitcoin": David Tepper Shares His Views On Cryptocurrencies And Gold

Picking up where we left off yesterday, when Appaloosa co-founder David Tepper warned a youthful audience at Carnegie Mellon's Tepper School of Business that "we may have reached the highs for the year", in the final part of his Q&A, the hedge fund billionaire (and contender to become the next owner of the Carolina Panthers) was asked about his views on the hottest tech and markets topic of 2017 - the "blockchain revolution."

Tepper admitted that he doesn't know enough about the technology to have an informed opinion - but he does have a view on the tokens themselves, and it's a relatively nuanced one at that.

The iconic investor said he views bitcoin more like gold than a currency - a position that, coincidentally, is also the official position of the CFTC in regards to bitcoin's official asset classification (though the SEC has also ruled that crypto tokens should be registered like traditional financial securities). The problem, Tepper says, is that the market dynamics are sketchy, to say the least. And as far as he can tell, most of these coins have little to justify a market valuation higher than what it costs to mine them.

He also said the cryptocurrency that can register the fastest transaction time should be the one that ultimately prevails in the market. That despite bitcoin's continued dominance of the crypto landscape for more than a decade, and attempts to remedy its lagging transaction times and rising fees spawned bitcoin cash and almost created a existential crisis for the cryptocurrency.

"As far as cryptocurrencies are concerned, I view them more like gold in the trading of them. I don't see the value above what it costs to mine them. The value that should work with them to a certain extent is who can make the fastest transaction times.

"It's hard to justify the price movements of bitcoin to me...there is some analysis of why that stuff might go up or down but I'm not a fundamental believer in the value of those cryptocurrencies above their mining value."

Has Tepper ever made any money off of bitcoin? Why yes, he has, but not as much as his son, who reportedly pocketed a sizable profit trading bitcoin during the boom, Tepper said. Tepper's own returns were minuscule - maybe $20 or $50 - after buying a small slug of bitcoin, although he timed his purchase well: back when one coin was worth roughly $200, back in 2015, around the time  when we urged readers to take the gamble ahead of China discovering bitcoin's "wonderful" capital control-evading capabilities.

And while Tepper admits that he doesn't really love bitcoin, he also admits that he doesn't really love gold all that much either.

"I don't really love bitcoins or bitcoin trading - and I don't really love gold either by the way. Actually I do own a little bit of bitcoin because my son made a lot of money trading bitcoin, but I think I made like $200. I only put in like $50 or $20 or something - I can't remember."

In the final question, Tepper offered a surprising response to a question about how students can prepare for technology-related instability in their careers - a prospect that MBAs universally dread. Tepper must've taken a page out of the book of the first "anti-automation" candidate for higher office, because his response was strikingly similar to a remark that New York businessman Andrew Yang made when he announced that he would seek to win the 2020 Democratic nomination in a long-shot bid.

"There may be a revolution in this country before there's not a need for truck drivers...if you're just prepared and continually try to learn things wherever you go I think you'll be ready for any changes that come."

Part 3 of his full interview can be seen below, while in earlier segments of the Q&A presented here overnight, Tepper shared his expectations for stock and bond market performance for the rest of 2018, as well as a few choice anecdotes about his time trading credit at Goldman Sachs in the late 1980s and early 1990s.

Comments

HRClinton Otsegoflesh Sun, 04/29/2018 - 16:28 Permalink

Big deal. I made a lot of GOLD with Bitcoin.

Who would be stupid enough to trade precious crypto for shitty Fed Fiat, conjured out of thin air?

The (((Teppers))) and their bankster mafia don't want you to exit Fiat, and join the PM-Crypto ecosystem. That's why they keep gaslighting you with "making money*" talk.

* Fed Fiat Debt Chits

In reply to by Otsegoflesh

smallblockchevy350 Bitchface-KILLAH Sun, 04/29/2018 - 16:56 Permalink

Long XRB NANO. It works better than all the coins you just listed and the transactions take less than 10 seconds. Also there are ZERO transaction fees. You send someone 1.4583 XRB and that's exactly what they receive on the other end, in less than 10 seconds. Try sending $0.01 USD using a crypto that has transaction fees and get back to me.

 

XMR is great for privacy, for everything else NANO. It's the only crypto that I would buy a coffee with.

In reply to by Bitchface-KILLAH

Bunga Bunga Bitchface-KILLAH Sun, 04/29/2018 - 17:49 Permalink

"the Bitcoin that Satoshi wanted the world to have" ... just an unproven claim, not supported by the white paper. When BCH extends to 32 MB blocks, then it is not a p2p currency anymore, because most users can't afford to run a node but have to rely on 3rd party services. The original reason behind BCH is the ability to control Bitcoin by a government. The main driver is China here and they found some useful idiots in the Western world. BCH is essentially the virus of cryptos.

In reply to by Bitchface-KILLAH

marysimmons Yellow_Snow Sun, 04/29/2018 - 18:05 Permalink

What will be the price of BTC be when the last BTC is mined?  $1Billion?  $1Trillion?  $1Quadrillion?  $Infinity?  Think about it.  The same for every coin/token that has a finite supply.  

This reality, coupled with constant inflation of major fiat currencies, is how the total crypto market cap can 100X's over the next 5-10 yrs, then 100X's over the next 5-10 yrs, then maybe even 100X's over the next 5-10 yrs

In reply to by Yellow_Snow

Exponere Mendaces Bitchface-KILLAH Sun, 04/29/2018 - 20:25 Permalink

BCash is Very Wrong Ver's ego-project, details here - https://hackernoon.com/thats-not-bitcoin-that-s-bcash-f730f0d0a837

Monero will fall when Bitcoin incorporates Schnorr Signatures, vastly boosting its transaction privacy.

Dash is a has-been that is languishing in the long tail of alts-that-aren't-dead-just-yet.

You trying to become like Crypto Jim "tmosley" Cramer? Because with reccos like that, you're getting close.

Its been hilarious watching the Very Wrong Ver fans try to struggle with Bitcoin Lightning dominance and superb fee reduction. Their heads are spinning so fast, they are in danger of creating a personal black hole. :)

 

In reply to by Bitchface-KILLAH

HRClinton Otsegoflesh Sun, 04/29/2018 - 16:36 Permalink

It's not irrational investment in crypto. Quite the opposite is true.

People are investing in crypto, because they are exiting the Fiat Debt Slave Plantation.

In its place, they are joining the freedom of the Parallel Economy (PE):

PE = DIY, Barter, PM, Crypto

 = bye bye CB slavery

 

But I guess you're either too dumb or too agenda-driven, to realize or admit that. Welcome to Fight Club, bitch.

In reply to by Otsegoflesh

Parrotile HRClinton Sun, 04/29/2018 - 16:53 Permalink

Unfortunately yet another sign of today's "best way to get rich" mentality - speculation.

Whether Bitcoin, or whatever - no added value for Society at large, and in the final analysis a zero net sum gain operation.

As we've seen from the ongoing Banking sector fiasco, those who speculate do extremely well. Those who provide added value (the essential Small Business Sector) do extremely poorly.

How to destroy an economy.

In reply to by HRClinton

artvandalai Sun, 04/29/2018 - 16:29 Permalink

I have yet to meet or hear of anybody who has sold their bitcoin position and then pulled cash-folding-money out of wherever it was at. Not being doubtful here but I haven't seen it yet. Am I missing someone who has?

animalspirit artvandalai Sun, 04/29/2018 - 16:44 Permalink

Are you talking actual paper cash, or just a move to fiat?

Cash trades are easily made most anywhere, but not for larger amounts -- at least not easily. And depending on your time preference, it may cost you a bit to make such a trade happen.

LocalBitcoins and HodlHodl are two places to find someone willing to buy your coins from you, and pay in "cash-folding-money". There are other over-the-counter (OTC) trading options as well, but they will vary based on your location, size of trade, trading frequency, and other factors. But yes, meeting up and getting a suitcase full of cash in exchange for your bitcoins something that happens. There are people who make a living serving as a broker in these types of deals.

In reply to by artvandalai

666D Chess Sun, 04/29/2018 - 16:53 Permalink

Cryptocurrencies are the new financial system, people think that owning cryptos is quite risky but I believe it that it's the opposite, not owning cryptos is the real danger. And just before Lester shows up, I would like to point out that since fiat currencies are worthless, nothing priced in fiat can be in a bubble and that goes for everything from cryptos to precious metals. Debt will be written off worldwide through a massive devaluation of fiat currencies. Good luck holding dollars or any other fiat currencies and also good luck owning precious metals, it won't be easy to take them out of the country that you are in and if you try to sell them, they are going to tax the hell out of you. 

vasallo7g Sun, 04/29/2018 - 17:13 Permalink

BTC has a key feature which no other currency had in history: A quantity limit.

It has other advantages like it cannot be copied or assigned to anyone randomly by someone.

But the limit factor will make this a currency that does not dilute its value.

This will trigger a prosperity era that now we can only dream about. 

Savvy vasallo7g Sun, 04/29/2018 - 18:33 Permalink

A quantity limit.

 

You can't be serious.

 

A common misconception among people who are new to Bitcoin is that they have to buy an entire Bitcoin, all at once, to get started. This is not true. Since Bitcoin is digital and practically infinitely divisible,

Read more at: https://www.vanguardngr.com/2017/11/can-buy-sell-send-receive-fractions…

 

It's a digital printing press and a social experiment in crypto fiat.

 

In reply to by vasallo7g

Exponere Mendaces Savvy Sun, 04/29/2018 - 20:30 Permalink

Are posting drunk?

Bitcoin is PRECISELY divisible into 0.00000001 units. It isn't infinite, it doesn't change on a whim, its supported by the entire network that ensures the rules are followed -- which is how consensus works.

If you made a client that specified that Bitcoin could be divided even further, none of your broadcasted transactions would be validated.

NONE.

That goes for the other rules that are embedded in the code - such as the 21 million coin limit. To change that, you'd have to convince every single user to participate in that folly. None would bother.

You need to watch more Andreas videos before you start talking about Bitcoin - you're getting a lot wrong here.

In reply to by Savvy