Billionaire investor and market pundit Howard Marks made news in July when he called Bitcoin a ‘fad’ in one of his famous investor memos, joining with other prominent investing experts. Marks famously predicted the dotcom bubble in 1999, and now manages approximately $99 bln in assets.
However, in his most recent Oaktree Capital memo, Marks retracted his position after being educated by some of his Bitcoin-loving friends regarding the cryptocurrency. After detailing a substantial part of his recent education, Marks concludes that Bitcoin is no different than US dollars, adding:
“There’s absolutely no reason why Bitcoin – or anything else – can’t serve as a currency if enough people accept it as such. While I’d point out that no private currency has gained widespread use in a long, long time, there’s nothing to say it can’t happen.”
The conclusion sums up Marks’ original concerns regarding a lack of fundamental intrinsic value, and rebuffs them.
Still not buying it
Marks hasn’t come around fully, however, and continues to be concerned about what he sees as widespread speculation. Even though he accepts that Bitcoin can function as a currency, he believes that Bitcoin’s outsized returns over the past three years could be the sign of a speculative bubble. The Bitcoin portion of the memo concluded:
“Thanks to the people who took the time to educate me, I’m a little less of a dinosaur regarding Bitcoin than I was when I wrote my last memo. I think I understand what a digital currency is, how Bitcoin works, and some of the arguments for it. But I still don’t feel like putting my money into it, because I consider it a speculative bubble. I’m willing to be proved wrong.”