Charles Bobrinskoy, vice chair and head of the investment group at Ariel Investments, has issued a stark warning about Bitcoin, calling it a “get-rich-quick scheme” destined to “end badly.” In a recent interview, Bobrinskoy argued that Bitcoin’s recent price surge is purely momentum-driven, fueled by speculative fervor and the allure of quick profits.
Bobrinskoy dismissed the idea of Bitcoin having intrinsic value. He pointed out that even proponents have shifted their narrative from transactional value to a store of value argument. He criticized those who believe the government is hindering Bitcoin’s progress, arguing that the cryptocurrency enjoys less regulation than other commodities and even foreign currencies. This lack of regulation, he contends, is precisely what makes it attractive to “blackmailers and foreign terrorists,” allowing large sums to be transferred without the scrutiny of “know your customer” rules that traditional banks must adhere to.
Bobrinskoy predicts a dramatic downturn for Bitcoin once the current momentum wanes. He acknowledged that short-term regulatory changes are unlikely, but believes increased regulation is inevitable in the long run as the government seeks to protect the US dollar and prevent individuals from financial harm. He also addressed concerns about the overall market being “frothy,” including the S&P. His advice to investors is to avoid tactical trading, which often leads to buying high and selling low. Instead, he suggests trimming overvalued positions, donating appreciated stocks to charity (taking advantage of current tax benefits), and reducing overall portfolio risk.
