Jeremy Grantham, co-founder of investment firm GMO, predicted that Bitcoin will gradually “dwindle away with a whimper” over decades, renewing his long-running criticism of the cryptocurrency on CNBC’s Squawk Box Friday.
“Over years and years, decades and decades, it will dwindle away, I suspect — not with a bang, but a whimper,” Grantham said. “It’s not a stable form of value.”
Grantham, who serves as GMO’s long-term investment strategist, characterized Bitcoin as a “useless, speculative” asset without intrinsic value. He argued that the cryptocurrency fails as both a practical medium of exchange and a reliable store of wealth, pointing to its recent sharp decline as evidence of instability.
“People don’t use it to make serious trades, they don’t use it to buy their dinner and pay at the supermarket,” Grantham said, adding that Bitcoin’s primary use is enabling illicit financial transfers. “What it does is allows crooks to move money around.”
Bitcoin is currently trading below $60,000, down approximately 52 percent from its October peak, according to CNBC. The cryptocurrency has become notorious for severe bear market crashes, dropping at least 70 percent from its peak in every market cycle.
Grantham has built a reputation over his career for identifying major market bubbles. He correctly identified warning signs ahead of the 2000 dot-com crash and the 2008 housing crisis. He co-founded GMO in 1977 and has remained active in market commentary as the firm’s chief investment strategist, frequently publishing letters and making public statements about asset valuations and market risks.
His Bitcoin skepticism stands in stark contrast to bullish predictions from other investors. While some market participants argue for cryptocurrency’s long-term potential as institutional adoption grows, Grantham maintains that the asset lacks the fundamental characteristics necessary for sustained value retention over time.
Sources
- CNBC — Grantham’s full statement on Bitcoin, his characterization of it as useless and speculative, current Bitcoin price and bear market history
- Seeking Alpha — Grantham’s argument that cryptocurrency fails as a stable store of value
- GMO — Grantham’s role as co-founder and long-term investment strategist
