Australian Retirement Trust (ART) chief economist Brian Parker has argued that there is no price at which bitcoin should be considered a sensible or attractive investment.
Speaking at a recent investment panel for financial advisers hosted by ART, Mr Parker dismissed the cryptocurrency as being “unregulated, completely opaque [and] highly volatile”.
“Nobody invests in bitcoin, you punt in bitcoin. We’re in the investment business, not the punting business,” he said.
“Bitcoin is a highly, highly speculative asset — I use the term ‘asset’ loosely — with an ecosystem fundamentally run by incredibly dodgy people. It is used to settle debts in everything from illegal arms trading to kidnapping to the drugs trade.”
Mr Parker suggested that bitcoin is traded on exchanges that are “opaque at best” and said that he didn’t know how to value the cryptocurrency or determine what its fair price is.
“I don’t know how it behaves over the longer term. This idea that somehow it’s an alternative to gold is complete bollocks because we don’t know how this behaves over the course of multiple economic cycles,” he continued.
“It is a speculative plaything which only emerged in some person’s libertarian fantasy, underpinned by the era of abundant liquidity and zero interest rates where people could get away with doing all sorts of dodgy things with money without consequence.
“Those days are over. So, is there a price at which bitcoin is a sensible investment in a portfolio? The answer is no.”
His comments come as the federal government considers how to regulate the crypto sector.
While a token mapping project has been announced, Liberal Senator Andrew Bragg has criticised Labor for failing when it comes to crypto regulation.
Senator Bragg, who recently introduced a new bill into parliament that would establish a licensing regime for crypto exchanges, said that the collapse of the FTX exchange last year demonstrated an urgent need for measures in the crypto space.
Meanwhile, while dismissive of bitcoin itself, ART’s chief economist noted that there is potential opportunity in the underlying technology.
“When you talk to some of our venture capital managers, are they looking at things like the blockchain and working out whether there is a business advantage or a longer term story there? Yeah, and that is absolutely worth exploring,” Mr Parker added.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
