Bitcoin has enjoyed a nice stretch lately, breaking through the $9,000 level on Tuesday and leading a broad advance in the crypto space, which has seen a $100-billion surge in market cap to $425 billion over the past week.
So, Bill Harris, are you warming up to bitcoin as an investment?
‘It’s a colossal pump-and-dump scheme, the likes of which the world has never seen… the losers are ill-informed buyers caught up in the spiral of greed. The result is a massive transfer of wealth from ordinary families to internet promoters.’
We’ll take that as a no.
Clearly, Harris, the founder of Personal Capital Corp. who served as CEO at both PayPal PYPL, -3.75% and Intuit INTU, -0.96% is not a fan, and he laid out the reasons why Tuesday in a piece for Recode.
“I’m tired of saying, ‘Be careful, it’s speculative.’ Then, ‘Be careful, it’s gambling.’ Then, ‘Be careful, it’s a bubble.’” Harris continued. “Okay, I’ll say it: Bitcoin is a scam.”
He went on to refute all the reasons promoters claim it has value. It’s not a means of payment since it’s accepted almost nowhere, he said. Bitcoin’s BTCUSD, +5.52% extreme volatility makes it undesirable as a store of value. And finally, he said its perceived value is merely an example of the Greater Fool Theory.
“Cryptocurrency is best-suited for one use: Criminal activity,” Harris said, pointing to the likes of Silk Road and WannaCry ransomware. What’s more, even the regular users are flouting the law, he says, by avoiding paying taxes on every sale.
“All of this would be a comic sideshow if innocent people weren’t at risk,” he said. “But ordinary people are investing some of their life savings in cryptocurrency.”
In conclusion, he called on the SEC and other regulators to step in. “It’s time we gave them the legislative authority to do their job,”: he said.