Personal finance guru Peter Adeney, often known by his moniker “Mr. Money Mustache,” has taken a stance in the bitcoin debate.
div > div.group > p:first-child”>
Adeney proclaims that people should not invest in the cryptocurrency, and argues that bitcoin is not an investment, likening it to “gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan….” in a recent blog post.
“These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future,” he writes.
He calls the value of cryptocurrencies “valueless bits of computer data” and say their trading prices are “imaginary.”
The personal finance guru — known for his popular blog and for retiring early, debt-free, at 30 — goes on to argue that those types of purchases are based on speculation, while investing involves, “buying an asset that actually creates products and services and cash flow for an extended period of time.”
He also rebuffs the popular argument that bitcoin will skyrocket in value if it ever becomes the “world’s currency.” In order for bitcoin to be a real currency, Adeney claims, it must be three things: easy and frictionless for trading between people, widely accepted as a legal tender for all debts (both public and private) and stable in terms of value. Adeney argues that bitcoin does not meet any of this criteria.
Adeney warns that without regulation, cryptocurrency is a long way from being a good buy.
“These days, stocks are regulated by the SEC, precisely because in the olden days, there were many, many stocks issued that were much like Bitcoin. Marketed to unsophisticated investors as a get-rich-quick scheme. The very definition of an unsophisticated investor is ‘being more willing to buy something, the more its price goes up,'” Adeney writes. “Don’t be one of these fools.”
Adeney is not alone in his attitude toward bitcoin.
“Shark Tank” star and investing expert Kevin O’Leary agrees that the cryptocurrency is too volatile to function as a currency.
“The fact is, it is so unstable — volatility is both directions, it’s up and it’s down — that nobody in a substantive transaction will take that risk,” O’Leary told CNBC Make It in December. “So it is a long way from being a currency.
Jordan Belfort, notoriously known as the “Wolf of Wall Street,” has also warned investors against buying into the bitcoin frenzy.
“I think it’s a huge danger right now that people are looking at this as the next great thing,” Belfort previously told CNN Money. “It’s a bubble for sure.”
A laundry list of other financial experts and investors are also bucking the bitcoin trend, and are warning people to approach the risky investment with caution. JPMorgan Chase CEO Jamie Dimon has dubbed bitcoin as a “fraud” and CNBC’s Jim Cramer on “Squawk Box” has likened the cryptocurrency to Monopoly money.
“It’s kind of like Monopoly money. Obviously, there’s people who use it. If you ever say anything bad about it, there’s like this bitcoin mafia that comes after you. But it is an oddity that has nothing to do with us,” Cramer says.
The value of bitcoin continues to ferociously fluctuate, and is currently trading at a little over $14,800 according to CoinDesk. Over 100,000 merchants worldwide accept bitcoin, CNBC Make It previously reported. Meanwhile, its rival cryptocurrency Ripple recently hit an all-time high with a value of $3.20.
Don’t miss: Here’s how you can—and can’t—spend bitcoin
Like this story? Like CNBC Make It on Facebook!