Saudi Prince Alwaleed bin Talal believes that bitcoin is “going to implode” due to a lack of regulatory supervision.
The bitcoin price has surged by more than 50% in October, enabling it to set new all-time high at just under $6,200 and increase its market cap dominance to about 59%. Despite an early-week pullback, the bitcoin price is still trading above $5,700, and it has fared noticeably better than other cryptocurrencies during the downturn.
Nevertheless, many traditional investors remain skeptical about this new asset class. Saudi Prince Alwaleed bin Talal, a billionaire investor whose conglomerate Kingdom Holding holds large stakes in Citigroup, Apple, and Twitter, told CNBC’s “Squawk Box” that the economic model of bitcoin “just doesn’t make sense” and will eventually cause the asset to implode:
“It just doesn’t make sense. This thing is not regulated, it’s not under control, it’s not under the supervision” of any central bank, Alwaleed said.
Echoing statements from financial services giant UBS, the Saudi prince implied that the crypto markets are in a bubble and outright predicted that their impending implosion would be reminiscent of the infamous Enron fraud scandal, which saw the blue-chip energy firm’s share price drop from $90 to pennies within months, ultimately leading to what was then the largest chapter 11 bankruptcy in history.
“I just don’t believe in this bitcoin thing. I think it’s just going to implode one day. I think this is Enron in the making,” he continued.
“I am in agreement with JPMorgan [chief executive Jamie] Dimon,” he added, referencing Dimon’s bombastic claims that bitcoin is a “fraud” that is “worth nothing”. Dimon has even called bitcoin buyers — a group that includes his own daughter — “stupid”, warning that they will pay the price when its value crashes to zero. Like Alwaleed, Dimon is skeptical that a currency can flourish without the approval and backing of a central bank. “Governments are going to crush it,” he has said.
However, as internet entrepreneur Kim Dotcom pointed out on Twitter, Alwaleed also derided Donald Trump as a “disgrace to America”, disbelieving that he could win a U.S. Presidential election, but quickly changed his tone after Trump won the 2016 election. “More like Prince Alt-Delete,” Dotcom joked.
Same Prince Alwaleed who said Trump’s a disgrace and will never be President. And after Trump won he apologized. More like Prince Alt-Delete https://t.co/PeDedv6K2u
— Kim Dotcom (@KimDotcom) October 23, 2017
Although Alwaleed’s bearish outlook is shared by many mainstream financiers and investors, others are beginning to soften toward bitcoin. Billionaire Mark Cuban — a bitcoin skeptic who compares the asset to baseball cards — advises “true adventurers” to allocate 10% of their investments into high-risk crypto assets. Hedge fund manager Mark Yusko, meanwhile, predicts that the bitcoin price could rise as high as $1 million over the next two decades.
Featured image from YouTube/The Official Kingdom Holding Company “KHC” Channel.