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The hedge fund legend and billionaire investor Mike Novogratz may have saw last week's bitcoin price drop to buy $ 15-20 million of BTC with a discount, but market forecaster Dennis Gartman maintains that there is "no value" in crypto incipient currency.
Gartman, who has been dubbed the "king of raw materials," told CNBC's "Fast Money" that he believes blockchain technology "has merit" and "will change the way we exchange … "There is no desire to enter the ecosystem of cryptocurrency as an investor or trader.
"It's a market … for criminals, it's a market for millennia," said Gartman Monday. "It's a market for pure punters, but there's no value here."
Parroting an often lobed insult, Gartman argued that the rapid rise in prices since the beginning of the year of Bitcoin reminds him of Tulipmania in 17th century Holland.
"It reminds me so much of the mania of tulip bulbs in Holland, of other bubbles that we have seen and which always end badly," he said.
When he was pressed to explain his bearish stance, he argued that the price volatility of bitcoin inhibited its use as a currency. "How can you buy or sell a painting using Bitcoin, while the volatility change is 20-30-40% over a week? It's a no -Sens, "he said.
It is true that the price of bitcoin remains very volatile, but this argument does not consider that the price of bitcoin will necessarily be volatile when the world market determines its fair value. It also ignores the prevalence of payment processing services such as BitPay, which automatically converts cryptocurrency payments into local currency at the point of sale to protect companies from price volatility. These services also help businesses use cryptocurrency to streamline payments across the supply chain across borders.
Gartman's skeptical stance on bitcoin is shared by many traditional financiers, including the emphatic Jamie Dimon. However, this legion of criticism is beginning to dwindle, and it is becoming increasingly difficult to claim that cryptocurrency attracts only criminals and probably inexperienced young investors.
Just this week, one of the world's largest hedge funds – the British Man Group – announced that it was ready to add bitcoin to its "investment universe" once the bitcoin futures would be launched on the US market.
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