Bitcoin posted additional gains on Tuesday, narrowing losses sustained the previous week and heading toward surpassing its previous record highs as investors continued to bet the world’s biggest digital currency is worth more than the market value of Apple (AAPL) - Get Report, General Motors (GM) - Get Report and even Tesla (TSLA) - Get Report.
Bitcoin was up another 2.55% at $55,039, according to CoinDesk. The digital asset set a record of $64,829 earlier this month.
As bitcoin continues to plumb the stratosphere, the chasm between those who believe it is 21st century digital gold and those who believe it is the biggest bubble in history continues to widen, drawing heated debate on both sides of the digital coin.
Bitcoin’s meteoric rise since late last year has made it increasingly difficult for naysayers to dismiss it. Believers say the technology behind it, the blockchain-ledger infrastructure that supports and affirms its value and its limited quantity makes it more valuable than gold.
Bitcoin has 'Zero Positive Utility'
Mark Yusko, CEO of Morgan Creek, has said he sees bitcoin exceeding $100,000 over the next year due to a “supply shortage.” J.P. Morgan analyst Nikolaos Panigirtzoglou has said he sees bitcoin hitting $146,000. Citibank managing director Tom Fitzpatrick is targeting $318,000 a bitcoin by December.
Others, including former Federal Reserve Chairman Alan Greenspan and well-known economist Nouriel Roubini have called it “the mother of all bubbles.” Alpine Macro economist Chen Zhao recently called bitcoin a “Ponzi” game - a nod to Charles Ponzi, the infamous shyster who literally robbed Peter to pay Paul.
“In our view, BTC has zero positive utility except that it is a hope that cryptocurrency might become money in the future,” Zhao wrote in a recent research note. “Should that hope die, the dollar price of BTC goes to zero.”
Musk back in February said that “money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency and error. The system will evolve to that which minimizes both.”
And he has doubled down on that theory since, with Tesla buying $1.5 billion of bitcoin and selling it last quarter at a more than $100-million profit. Tesla on Monday posted record earnings and sales - and a lift to its balance sheet thanks to bitcoin.
Best-selling author and former hedge fund manager James Altucher back in June 2019 reiterated his $1-million-dollar bitcoin call that he boldly made back in 2017.
But there have been naysayers well before bitcoin's first meteoric rise. Gene Collins, chairman of the investment committee of the University of Toledo, told TheStreet back in 2014 that bitcoin was "investor porn."
21st Century 'Irrational Exuberance'
Said Greenspan in late December: “Currencies to be exchangeable have to be backed by something. I do not understand where the backing of Bitcoin is coming from.
"There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or the trust of the individual who is issuing the money, whether it’s a government or an individual,” the former Fed chief added.
Peter Schiff, chief market strategist at Euro Pacific Capital and one of the most outspoken bitcoin critics in the space, told Kitco in January that he believes bitcoin is a pumped-up bubble that will eventually lead most investors to financial ruin.
"It doesn’t matter that the price has gone up. [...] Eventually, the supply of fools will run out and the biggest fool ends up being the bag holder."