Gary Shilling, a prominent and highly regarded Wall Street financial analyst, recently said in an interview that he doesn’t understand Bitcoin and do not intend to invest in “things that are not transparent.”
While his statement was factually inaccurate, as Bitcoin is the most transparent financial network in existence due to its decentralized blockchain network, it is optimistic to see investors acknowledge their lack of knowledge in Bitcoin, rather than simply calling out Bitcoin as a “bubble” or a “fraud,” as figures such as JPMorgan CEO Jamie Dimon did in the past.
Shilling Doesn’t Want to Invest in Bitcoin Because he Doesn’t Understand It
Over the past 12 months, the viewpoints of analysts and billionaire investors such as Mark Cuban, Peter Schiff, and Gary Shilling have changed drastically. Cuban, who had consistently described Bitcoin as a bubble, inevitably invested in Bitcoin through a Swedish Bitcoin exchange-traded note (ETN) known as XBT provider. SchiffGold, the company of Peter Schiff that is overseen by GoldMoney, integrated Bitcoin for its clients.
In a recent interview with Business Insider, Shilling admitted that he does not understand the technical intricacies and the fundamental concept of Bitcoin. Shilling said:
“I recently met a friend of mine, a West Coast venture capitalist. He was very early on this [Bitcoin]. He’s made a lot of money on this and so on. I cornered him at a cocktail party and I said ‘Now listen, I want you to explain to me what this really is.’ I’m just very suspicious of things that are not transparent. If i can’t understand it, I don’t want to invest in it.”
Shilling’s investment method is praiseworthy and should recommended to casual investors. It is definitely not intelligent for investors to invest in assets and currencies that they do not have solid knowledge of. As Hacked.com reported, Bitcoin and security expert Andreas Antonopoulos advised investors to only invest an amount of money in Bitcoin that is proportional to their knowledge in the cryptocurrency. He said:
“My small savings that I do have are invested in bitcoin. 100 percent [of it]. I actually have a tiny debt in US dollars that I’m still trying to pay off so it is more than 100 percent in bitcoin. Now, I’d like to emphasize again, that is not a recommendation to invest. Because I haven’t invested by money in bitcoin, I invested my career, my intellectual capacity, my creativity energy, my passion, and my work in bitcoin. The money is the least of the investment that I have made in bitcoin and I could lose everything of it and I’d still have everything else.”
Landscape is Changing, More People are Starting to Understand Bitcoin
If investors do not understand Bitcoin and its concept of a peer-to-peer decentralized financial network, they should not invest in it. For investors like Shilling who has been exposed to the centralized monetary system of fiat currency for many decades, it is significantly more difficult to grasp the concept of decentralized networks and peer-to-peer financial systems.
But, more investors are starting to understand it. As Shilling noted, many venture capitalists, institutional investors, and large-scale retail traders have started to invest in Bitcoin. Most notably, Fidelity and Mike Novogratz have been strong advocates of Bitcoin.
Most recently, George Kikvadze, the vice president at Bitfury, one of the largest blockchain development and Bitcoin mining firms, stated:
“Great to finish up dinner with one of world’s’ largest wealth funds and convince them to invest in both Bitcoin and Litecoin.”