“
‘My initial response was a knee-jerk reaction without information, and that’s not a good way to behave. So 3-4 years ago I was willing to comment; now I’ve learned how much I don’t know…you shouldn’t talk about things you don’t know about.’
”
— Howard Marks, Oaktree Capital
That’s Howard Marks, telling the Korea Economic Daily, in a video interview posted Tuesday, that he wishes he hadn’t been so quick to dismiss bitcoin in 2017, when he described cryptocurrencies as an “unfounded fad.”
So what has Marks learned? The investor said he initially dismissed bitcoin because of its lack of intrinsic value. “But there are a lot of things that people want and value highly which have no intrinsic value,” he noted.
But Marks, the billionaire co-founder and co-chairman of alternative asset manager Oaktree Capital Management, didn’t sound fully convinced that bitcoin proponents had sealed the case for the digital asset, either.
One of the cases for bitcoin is that since its supply is limited by a cap on how many coins can ultimately be produced and demand is increasing because more people are becoming interested in it, prices should rise, but that reasoning seems a bit “circular,” Marks said.
Are there any independent reasons to hold bitcoin? The argument is that it can be used 24 hours a day, 7 days a week; its confidentiality; and other factors, he said.
“There are all these arguments about why people want it…But is that a sufficient reason? That’s the question,” he said.
Marks acknowledged that bitcoin
BTCUSD,
-0.43%
was trading around $5,000 when he initially dismissed the digital currency in 2017. It’s now changing hands north of $55,000, having set an all-time high over the weekend north of $60,000.
“I was dismissive in 2017 and I can’t claim to be proved right yet…The people who bought it at $5,000 — so far they look right,” Marks said.
