It’s often said that you should never kick people when they’re down, but does that same general rule of decency apply to cryptocurrencies?
Apparently it doesn’t, at least if you’re UBS Wealth Management’s global chief economist Paul Donovan.
Even when Bitcoin was soaring toward record highs a year ago this month, Donovan remained skeptical, telling CNBC at the time that the world’s largest cryptocurrency by market value was a bubble and “bubbles sucker in large numbers of people and take their money and give it to a small number of people,” which is “very destructive in the long term.”
Now that Bitcoin and all other cryptocurrencies are in a prolonged slump, Donovan took a little time to gloat in a recent Shakespeare-referencing note, writing that “I come to bury Bitcoin, not praise it.”
And in new interview with CNBC, Donovan doubles down on the hate:
“These things were never going to be currencies. They’re not going to be currencies at any point in the future,” he said Thursday on CNBC’s “Fast Money.” “They’re fatally flawed.”
Bitcoin received lots of love during the 2017 holiday season when it began rallying to nearly $20,000. But Donovan was skeptical then, warning that it could be “destructive” in the long term.
“Right from the start of the hike in late last year, it was fairly obvious that this was going to end badly, unfortunately, for some of the people who weren’t protected by any kind of regulation and got sucked into the process,” he told CNBC.
Donovan adds that “the absolute fundamental flaw” with cryptocurrencies “is that they’re never going to be a store of value” because with cryptocurrencies “you cannot control the supply in response to the drop in demand.”
Bitcoin dropped 8 percent to start December, trading at $3,835.25 by Monday afternoon in New York, according to data from CoinDesk.
Photo: Getty iStock