Bitcoin is Enron in making, says Prince Alwaleed bin Talal
24 Oct 2017
Billionaire Saudi Prince Alwaleed bin Talal, who owns investment firm Kingdom Holding is sceptical about crypto-currencies. In an interview with CNBC yesterday he warned that bitcoin was like ''Enron in the making''.
According to prince Alwaleed, whose company has invested in major US companies such as Citigroup and Twitter, a lack of regulation made such cryptocurrencies risky.
''I just don't believe in this bitcoin thing. I think it's going to implode one day. It's Enron in the making,'' he said. The reference is to the US energy company that filed for bankruptcy in 2001 following revelations of a widespread accounting fraud, in its energy trading business.
''This thing does not make sense. It's unregulated. It's not under the control of the US Federal Reserve or any other central bank,'' he added.
The virtual currency has gained over 500 per cent this year, more than any other tradable asset class.
He further added that the valuation of electric car maker Tesla Inc was ''too exuberant'' for him to invest.
''I would rather not comment on that because maybe some people think the valuation is right, but it's not for me to enter [at] that price obviously. It's too exuberant for me right now.''
He added that US ride services company Lyft had been better priced than rival Uber when his investment firm bought into it.
He added he was ''very happy'' with his investment in Citigroup and saw potential for the share price to increase above $100. It is currently trading at around $73.
"Saying this is going to blow up is not profound. It does that on a regular basis," Ritholtz Wealth Management CEO and CNBC Contributor Josh Brown said yesterday on CNBC's "Halftime Report."
"You should expect regular blow ups because it's all speculative. Doesn't mean it's [not] going to outlive each and every blow up along the way."
Brown added that it should not be surprising that Alwaleed is critical of bitcoin, given his ties to the authoritarian Saudi Arabian rulers. Bitcoin owes its dizzying rise to its ability to be a global currency outside government control among other things.
.webp)
