Kevin Duffy on bitcoin

I heard someone say bitcoin is 80% speculation and 20% hedge against the fiat money experiment blowing sky high. That sounds about right. While I’m largely agnostic on bitcoin, mainly because it is outside my circle of competence, the speculative forces are hard to miss. Exhibit A: MicroStrategy, a modest software business turned large-scale holding company for bitcoin, has been extremely aggressive with its buying lately. In the past at least, that’s been a sign of a top. 

On March 8, MicroStrategy (MSTR) issued $800 million worth of convertible notes paying just 0.625%, above the $650 million initially hoped for. The offering was so well received that, five days later, the company announced plans to raise another $500 million. The fact that investors are handing substantial sums of money over to MSTR on such favorable terms to go speculate in bitcoin is a clear red flag.

~ Kevin Duffy, "Mailbag," The Coffee Can Portfolio, April 15, 2024

Jim Grant on Bitcoin: "It's simply crazy"

So if you're really a zealot on Bitcoin what you are saying is the world of technological innovation will never create something better.  It's simply crazy.  Bitcoin trades like a tech stock.  It is as vulnerable to disruption as any other tech stock.  Who's to say it's not the PalmPilot of cryptocurrencies?

~ Jim Grant, interview with William Green, 1:20:50 mark, August 20, 2022

Jan van Eck sees Bitcoin eventually going to $250,000 (2022)

Bitcoin will go to half the market cap of gold, or $250,000 a Bitcoin, but that could take decades.  It's hard to put a time frame on it.

[...]

Bitcoin has a great future.  In 2017, I thought that the drawdown risk was 90%, which is dramatic.  I think that the maximum drawdown risk now is 50% or so.  That means it should have some floor around $30,000.

~ Jan van Eck, "A Bitcoin Bull's Bold Prediction," Barron's, June 11, 2022

Warren Buffett on Bitcoin

The core use case for Bitcoin is to sell it to someone else.

~ Warren Buffett

Peter Boockvar on gold vs. Bitcoin

Ferris: The narrative right now is that Bitcoin replaces gold. That's why gold has basically sucked wind for most of the last year here.  What do you think of that idea?

Boockvar: I've been hearing obviously the same thing for a while and I think it's complete nonsense that something that's been around for 13 years is going to replace something that's been around for 5,000 years.  When you've been around for 5,000 years, you've been through a lot.  You've been through depressions and droughts and hyperinflation and deflation and world wars and so on and so on.  When you've been around for 13 years, particularly the last 13 years, all you really know is zero rates, negative rates and QE [quantitative easing].  That's pretty much all you know.  Now I do think that there's potentially going to be a place for crypto and that it can complement gold and silver in one's portfolio, but it has to prove itself.  It has to prove itself in an era of inflation that we are currently in.  It has to prove itself when there is global synchronized monetary tightening that is now in place.  It has to prove itself.  And like I said, 5,000 years of existence, you've sort of proved yourself in many different ways.

~ Peter Boockvar, interview with Dan Ferris, Stansberry Investor Hour, 40:45 mark, February 21, 2022

Ronald Stöferle compares gold with bitcoin

Gold is like a solid, stable, reliable SUV while bitcoin is like a Ducati Panigale, like a really, really strong motorcycle.  Once it starts raining it's getting a bit dangerous and slippery on your motorcycle.  However, I think this whole competition between gold and bitcoin is ridiculous.  In our funds we combine both.  But of course the volatility of bitcoin is tremendously higher as the track record is not 5,000 years.  So we have to manage expecations when it comes to gold.  Gold's job is not to make you rich.  I think mining stocks can make you rich, silver can perhaps make you rich, cryptos and so on.  The job of gold is to preserve your purchasing power, to protect your savings.  And I think gold is doing that job pretty well. 

~ Ronald Stöferle, "Is inflation transitory or not?," interview with Daniela Cambone of Stansberry Research, 11:10 mark, June 16, 2021

Matthew McLennan on speculative excess

Q: Are there signs that investors aren’t taking these risks seriously? 

A: There are periods where the market pays a premium for growth, and then there are market environments where it’s not even about growth—it’s about optionality and acceleration.  You see that in multiple dimensions now: Witness the dramatic rise of Bitcoin or the eye-popping valuations of some of the larger companies in technology or alternative energy.  Or the whole creation of the SPAC [special purpose acquisition companies] market where, again, people are paying for optionality—they’re paying for the potential to own a business.  They don’t even know what it is yet.  Things like that make one a little wary. 

I’ve also received calls from friends of my children and older people—all wondering how they can make money quickly in some of these emergent fields.  I haven’t received such a frequency of calls since the late 1990s.  It feels like one of those moments where it’s worth reminding people that the whole point of investing is to preserve purchasing power.  If you’re prudent, you hopefully grow your purchasing power in a way that’s resilient.

~ Matthew McLennan, portfolio manager, First Eagle Investment Management, "A Time for Worry - and For Yogurt," Barron's, April 17, 2021

Randall Forsyth on fund flows going into cryptocurrencies

One would have thought that the Fed’s rapid monetary expansion [$4.2 trillion increase in M2 money supply over the past year] to help spur the economy’s recovery would have lifted gold.  But the main beneficiaries have been cryptocurrencies.  According to a J.P. Morgan report, $20 billion flowed out of gold exchange-traded funds in the most recent two quarters, while $7 billion went into Bitcoin funds. 

~  Randall Forsyth, editor of the Up & Down Wall Street column, Barron’s, April 10, 2021

Felix Zulauf on Bitcoin mania

I don’t believe that Bitcoin will ever make it as money used in daily payments.  It is too complicated, the price is too volatile, and “mining” it requires too much energy.  But as long as people think of Bitcoin as a safe store of value, the price could go higher, and it could become a mania.  At the peak of the tulip-bulb mania [in the 1630s], the most expensive tulip bulb cost as much as a house.  That suggests Bitcoin could reach $1 million someday.  But tulip bulbs trade today at only $10 a dozen.

~ Felix Zulauf, "The View From Europe," Barron's, February 20, 2021

Cathie Wood predicts $250,000 Bitcoin price if companies step up (2021)

If all corporations in the U.S. were to put 10% of their cash into bitcoin that alone would add $200,000 to the bitcoin price.

~ Cathie Wood, "Bitcoin could hit $250,000 if U.S. companies opt to do this, says Cathie Wood," MarketWatch, February 17, 2021

(Bitcoin closed at $51,376.)

Cathie Wood on Bitcoin as a portfolio diversifier

If you look at the correlation of Bitcoin's performance relative to any other asset class, it has the lowest correlation.  Meaning, if you buy some Bitcoin you will further diversify your portfolio and increase your returns with lower risk, right?  So that's why institutions look for that low correlation.  Bitcoin has it.  And so that's clear; we have 10 years of history now. 

~ Cathie Wood, "A typical day for Ark Invest's star stock picker Cathie Wood," Yahoo!Finance, 17:50 mark, February 6, 2021

(Bitcoin closed at $39,267 on Feb. 6.)

Dan Ives on Tesla's $1.5 billion bitcoin bet

[W]e do not want the bitcoin mania to overshadow the underlying EV hyper growth story taking place at Tesla.  Herein lies the fundamental driver of the stock’s value.

~ Dan Ives, Wedbush analyst, "Tesla’s big bitcoin bet could come back to bite the EV maker," Yahoo!Finance, February 10, 2021

Paul Tudor Jones: "I think we are in the first inning of bitcoin"

I think we are in the first inning of bitcoin and it’s got a long way to go...  The reason I recommended bitcoin is because it was one of the menu of inflation trades, like gold, like TIPS breakevens, like copper, like being long yield curve and I came to the conclusion that bitcoin was going to be the best inflation trade...  Bitcoin has this enormous contingence of really, really smart and sophisticated people who believe in it.  It’s like investing with Steve Jobs and Apple or investing in Google early.

~ Paul Tudor Jones, "Paul Tudor Jones says he likes bitcoin even more now, rally still in the ‘first inning’," CNBC.com, October 22, 2020