The GMO co-founder and chief investment strategist built his reputation by identifying speculative asset bubbles as they were unfolding.
The Wall Street veteran avoided investing in Japanese equities and real estate in the late 1980s during the peak of the Japanese asset price bubble, avoided technology stocks during the dot-com bubble of the 1990s, and limited his exposure to the housing bubble before the 2008 financial crisis.
Related: Cathie Wood issues sharp Bitcoin prediction after billionaire’s warning
Grantham predicts Bitcoin will crash to ‘zero’
In fact, Bitcoin will “dwindle away… not with a bang, but a whimper,” he argued. Bitcoin isn’t a stable form of value and recently crashed to half of its record price in a strong economy, he added and compared it to unfavorably to gold which has performed well comparatively.
While Bitcoin’s price has crashed 45% in a year, gold’s price has surged 20% during the same period.
An asset as volatile as crypto can’t offer long-term stability, he remarked.
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The billionaire also pointed to its negligible use case, saying nobody uses it to pay at restaurants and it is only looked at as an speculative asset. Worse, it is being used to facilitate illicit transactions, he decried but clarified that his criticism doesn’t extend to the blockchain technology underlying cryptocurrencies.
