Bitcoin’s value is based purely on speculation and will not produce long-term returns.
That’s the verdict of one of America’s top fund bosses, who says Bitcoin has no underlying value.
Speaking to CNBC, Tim Buckley, who is chief executive of Vanguard, said the company would never have a Bitcoin fund.
“Bitcoin’s value is based off scarcity, an artificial scarcity that’s out there,” he said.
“It’s really tough to imagine where the long-term returns come from, other than speculation.”
'No economic value'
He added: “You will never see a fund from Vanguard on Bitcoin. We tend to stay away from assets that don’t have an underlining economic value. They don’t generate earnings or cash flows.”
Meanwhile, also speaking on CNBC, Bill Browder, CEO of Hermitage Capital Management, warned government crackdowns on cryptocurrencies would gather pace.
“Bitcoin and other cryptocurrencies are a way for bad dictators or criminals to bypass sanctions and so from my perspective, and I think from the perspective of politicians around the world, governments are not going to allow that to happen,” he said.
‘It’s not going to happen’
“They will eventually regulate all cryptocurrencies in the same way you can’t take out more than $10,000 out of the bank without reporting it to the US government. They’re not going to allow people to take a million worth of Bitcoin and move it from Russia to Switzerland. That’s just not going to happen.”
However, in contrast, Bobby Lee, CEO of Chinese Bitcoin exchange BTCC, said he believes the Bitcoin price will hit $1m in the next 20 years.
Speaking to Express.co.uk, he said, “Bitcoin, I think will get to $1m per bitcoin.
“Right now it’s $10,000, it will go $100,000 and then $200,000, $500,000. Half a million, that’s going to be a milestone, and then eventually it will cross $1m.”