Hedge fund manager Paul Singer, founder of the $34bn Elliott Management and a long-time critic of cryptocurrencies, has renewed his attack and claims that a “dénouement” is approaching.
“FOMO (fear of missing out) has solidly trumped WTHIT (what the hell is this?),” Singer wrote in a letter to clients dated January 26, which was first reported in Business Insider. “When the history is written, cryptocurrencies will likely be described as one of the most brilliant scams in history,”
Over three pages, the fund detailed what it regards as issues with cryptocurrencies.
The outer limit
Singer said that digital assets, which have increasingly gained the attention of investors and the media in the past year, represented “not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars.”
Cryptocurrencies are the marketing power of inventors, financiers, and “others who love the idea of buying a black box (which is obviously empty) for the price of a Kia and dreaming that it will turn into a Mercedes,” he suggested.
Singer went on to attack those trading digital currencies, questioning their morals and ethics. “But is it not glorious that when the equivalent of nothing attracts priests and parishioners who run up the price, the very willingness of the mob to buy it at higher and higher prices is seen as validation of the thing, rather than an indication of the limitless ignorance of swaths of the human race?” the letter concluded, according to BI.
This latest attack on the cryptocurrency market isn’t his first. In 2014, Singer criticised bitcoin proponents, who argue that the digital currency will replace gold. He said bitcoin has yet to stand the test of time like traditional assets such as gold, adding that the difficulty of extracting gold makes it a more lucrative store of value.