LendingTree Chief Economist Tendayi Kapfidze told reporters at Yahoo Finance January 1st that Bitcoin is “a pyramid scheme” and a scam with no particular utility.
Kapfidze made the comments just after co-panelist Oliver Pursche, Chief Market Strategist at Bruderman Asset Management, described his own cryptocurrency investments and said, “(T)here’s something here. I just don’t know what it is.”
“I know exactly what’s there,” Kapfidze responded. “It’s a pyramid scheme. You only make money based on people who enter after you.”
“It has no real utility, in the world,” he continued. “They’ve been trying to create a utility for it for like 10 years now. So, it’s a solution in search of a problem and it still hasn’t found a problem to solve.”
“I don’t think it’s a pyramid scheme,” Pursche countered. “I think those are very very different…You’re partially right in the sense that we haven’t identified what problem it solves … As real advocates would say, there’s an equal amount of problems with the current currency systems in terms of the manipulation going on there … What central banks are doing is not exactly natural.”
“Didn’t someone manipulate the…price of Bitcoin mid-year?” an interviewer interjected.
“There is clear manipulation, which is why…I say it’s speculative,” said Pursche, urging caution. “You go into it very soberly understanding that you can lose your whole principal…For me it’s a way to get educated on it…I didn’t put a whole lot of money on it…To me, if you want to learn about it, you’ve got to own it because that’s the only way you’re going to truly educate yourself and pay attention.”
“It’s a scam,” Kapfidze responded. “It doesn’t mean everybody in it is a scammer, but it’s a scam.”
“(What about the) true believers…buying this stuff because they think that it’s going to replace fiat and become the new global currency at some stage?” the other interviewer asked.
Kapfidze persisted:
“Think of all the intellectual power and energy and time that has been put into Bitcoin over the past ten years and what do we have on the end of it? We’ve got nothing…I guess maybe at some point, somebody’s gonna come up with some utility…but so far, despite thousands of people trying, and…thousands of people advocating for it, and people trying all types of different things, we still have nothing…So that makes me skeptical.”