Cryptocurrency has been growing rapidly over the past year, but many investors are yet not sure about it. One of them is Lee Cooperman. The US billionaire investor and hedge fund manager says he still does not understand Bitcoin. Speaking to CNBC, he stopped just short of criticising Bitcoin, saying only that people his age are finding it difficult to understand the world's largest cryptocurrency. He made it clear that he thinks it's not in the interest of the US government to further a substitute for the dollar.
What is Bitcoin?
He thinks there are two types of people who want to buy Bitcoin now: those who want to gamble with a fickle form of money and those who want to store it for future use. As of now, the price of Bitcoin varies by the hour, and its market value is growing by the day. According to Cooperman, investors buying Bitcoin for speculation "are going to be very disappointed." READ MORE: Cryptocurrency Market's 2018 Rebound Unfazed by US Bitcoin Crackdown — Analysts Cooperman's thoughts about Bitcoin mirror many other people's who tend to criticise it for being a scam. Bitcoin is not backed by any kind of fundamentals and the laws of supply and demand do not apply in the blockchain-based financial system. He admitted that he is keeping an eye on Bitcoin, but he admits that he doesn't understand it.
Billionaire investor Lee Cooperman says he doesn't know what the deal with Bitcoin is
“Bitcoin is just a payment system,” Cooperman told CNBC, “I don’t think there is anything inherently useful about Bitcoin other than it serves a payment system.” He added that he does not think cryptocurrency is useful in any other way. The comment was made during the TV network's Inside Markets segment in which Cooperman expressed his opinion on the world's biggest cryptocurrency. He said it is not a good thing for the US government or for the US economy in general, and he thinks he is right because it's not a good system. “It’s not a very useful currency,” Cooperman said. “Not very practical to buy and hold. I find it very difficult to understand the benefit.” He is not the first one to declare his scepticism about the benefits of Bitcoin.
How does Bitcoin work?
Cooperman is optimistic about the concept behind cryptocurrencies. He also stated that he believes cryptocurrency has a lot of potential, but noted that at the same time he does not think it will be as revolutionary as the internet was. He then pointed out that, if you compare it to the internet, there is a lot more utility than just sending money. However, Cooperman is the first to admit that his understanding of the technology is still very limited. He recently spoke to Forbes to give an update on his perspective. Lee Cooperman said: I'm not an expert. I do know that there is a market for Bitcoin and there is a market for blockchain. I'm not an expert, but I feel like it's not that complicated. He did not call Bitcoin a bubble by any means, he said: I don't see it as a bubble.
What are the benefits of Bitcoin?
Lee Cooperman was quick to criticise Bitcoin on CNBC, stating that Bitcoin does not have any intrinsic value and that it is even worse than gold. He pointed out that gold has value because it has the ability to be mined, whereas Bitcoin has no value. He said that Bitcoin is only used as a payment currency which makes it the opposite of real money. This is because it cannot be bartered for other currencies, and cannot be saved. "I will not invest in Bitcoin. I think it's a form of money that is rejected by the majority of the world, and I will not invest in it. It is not a legitimate form of money. It is not a form of money you can save. I do not understand it," he said. When Lee Cooperman announced his plans to buy Bitcoin in 2013, people thought he was crazy.
Who is affected by Bitcoin?
The cryptocurrency industry, which emerged in the wake of the financial crisis, is now struggling to make its mark in mainstream society. Lee Cooperman describes himself as a "geek" when it comes to numbers and I am intrigued to learn more about the performance of Bitcoin, what it means for the future and what the implications are. "I would tell you that my mind is not caught up on it yet. I know what they're doing but I don't know what they're doing," he said. Cooperman, who has been investing in US companies for nearly 50 years, says Bitcoin is not the same as his portfolio companies. © Sputnik / Sergey Guneev History Repeats Itself: Crypto Funds Target Nobel Laureate Economist Joseph Stiglitz "These are smart people and they know something, I don't.
The fact that Lee Cooperman, who is the 73rd richest American and chairman and CEO of Omega Advisors, an investment firm founded by George Soros, doesn't understand Bitcoin does not come as a big surprise. It's also not clear if he did a lot of research before making this statement. The remark comes as the cryptocurrency continues to fight against the negative stigma that continues to stick to it. However, a positive sign for the crypto market is the fact that the likes of Cooperman are still bullish about the prospects.