Oaktree Capital’s Marks Calls Crypto “Pyramid Scheme”br>
Oaktree Capital co-chairman Howard Marks has issued a newsletter that said cryptocurrencies are “an unfounded fad,” and warned his clients to avoid them.
Marks, who is best known for calling the Internet bubble of 1999, added that cryptocurrency may be a “pyramid scheme.”
“In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” Marks wrote.
He compared the current state of cryptocurrency to the Dutch Tulip mania of 1637 and other infamous bubbles.
“Serious investing consists of buying things because the price is attractive relative to intrinsic value,” Marks said. “Speculation, on the other hand, occurs when people buy something without any consideration of its underlying value or the appropriateness of its price.”