Howard Marks says that the cryptocurrencies 'aren't real'

Howard Marks, billionaire investor and founder of Oaktree Capital Management is adamant about his stance on cryptocurrencies like Bitcoin, Ether and others: “They’re not real.”

“I’d guess these things have arisen from the intersection of (a) doubts about financial security — including the value of national currencies — that grew out of the financial crisis an (b) the comfort felt by millennials regarding all things virtual,” writes Marks. “But they’re not real.”

Marks has clearly done his homework. The 22-page letter is full of research notes and quotes from the New York Times, Wall Street Journal and others about blockchain-based currencies. But he’s still unconvinced that they hold any long-term promise.

Marks isn’t the only old-school Wall Street player to be skeptical of digital currencies. Major banks like Morgan Stanley have recognized Bitcoin’s use as a value-holding asset, but are hesitant to call it a true currency.

For people like Marks, Bitcoin has a steep learning curve. It’s not as simple as traditional fiat currency, with notes backed by a central bank and transferred through clearinghouses. Instead, Bitcoin utilizes a blockchain, which can instantly credit and debit ledgers of parties involved in a transaction.

“Nobody has been able to make sense to me of these currencies,” he writes.

Source: Bloomberg Pro Terminal

Jr Trader Ivan Ivanov

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