While talking to CNBC, Icahn, the founder of Icahn Enterprises, recently admitted that he does not understand much about bitcoin, and added that for him, it "looks like a bubble ", specifically reminding him of a bubble involving swamps. Mississippi.
After insisting that he "simply does not get" the enthusiasm behind bitcoin and other crypto-currencies, he likened it to the 18th century land bubble century, declaring:
"If you read history books about all these bubbles, like in Mississippi, where John Law sold all those Mississippi lands that were worthless and the French went crazy giving him all that money And then, one night, everything exploded … for me, that's what it is. "
The famous Mississippi bubble, brought by the adventurer and Scottish economist John Law, consisted essentially of giving him the power to open a company to manage the French land claims trade near the Mississippi River. To finance the transaction, he issued paper shares to investors who, under the lure of gold and silver, bought these shares with an increase of 1,900 % in less than a year, according to historian Jon Moen of the University of Mississippi. ]
Per Moen, many turned into millionaires at the time, but things went south when people realized that much of the land was swamps only no value. The Icahn comparison suggests that the same thing will happen to bitcoin, which is up more than 1,000% since the beginning of the year, once people see it more valuable .
What it neglects, however, is that the growth of cryptocurrency has been accompanied by a surge in its adoption, popularity, and its user base . Coinbase, the largest US-based cryptocurrency exchange, added 100,000 new users in one day last month.
Icahn added:
"I have to tell you honestly, I do not understand it, I'm the last guy – I do not understand, I just stay out of something if I do not understand it."
Recently, other important big financial plans have also criticized the cryptocurrency. Goldman Sachs CEO Lloyd Blankfein recently denounced cryptocurrency as a "vehicle for fraud", while Joseph Stiglitz, a Nobel Prize-winning economist, said that bitcoin "should be outlawed".
Featured image from YouTube / Bloomberg.