When it Comes to Bitcoin, Dave Portnoy Knows Nothing
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When it Comes to Bitcoin, Dave Portnoy Knows Nothing

The self-made marketing guru has recently transitioned from day trading to Bitcoin — a 'ponzi scheme' in his eyes.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

We’ve heard a lot about high-profile investors changing their tack on Bitcoin and cryptocurrencies in the past two years. Many have indeed begun to see the value in certain cryptocurrencies as a new way of exchanging value. Is ‘Davey Day Trader’ the latest to join this group?

There are clearly many investors in the digital asset space without the belief that there is an intrinsic value to the asset class. Of course, the cryptocurrency market is filled with investors who are looking to get-rich-quick — with most of them failing. 

The one high-profile trade referred to here is Barstool Sports founder and recently popular day trader, Dave Portnoy, who has made quite the stir in trading communities. Even more so since he decided to enter the cryptocurrency market. 

Portnoy has been in the news of the cryptocurrency world recently for his entry into the market. Portnoy had met with Gemini Exchange founders the Winklevoss twins to discuss the asset class — and was apparently persuaded to begin investing.

What Does Dave Portnoy Think of Bitcoin?

But now things are a bit different. Portnoy, who has kept the public aware of his crypto trades, seems to believe that Bitcoin is a ponzi scheme or, as he likes to say,

“You get in, and you just have to not be the one left holding the bag.”

Portnoy was interviewed by Morgan Creek co-founder and partner, and Pomp Podcast host, Anthony Pompliano, on September 24. He had a lot of things to say about Bitcoin and the market, but his sentiment can be summed as distrusting. 

He even thinks that the cryptocurrency and stock markets are the same in that there is a constant media barrage, but believes there is an advantage to stocks. He says “he doesn’t know what this is and it’s too much money”, in reference to the crypto market.

But with stocks, it’s easier to cash out. He told Pompliano this after the latter tried to explain why Bitcoin has so much intrinsic value. 

This exchange really goes to show that we need to educate people on Bitcoin. Portnoy says he “needs accountability” when it comes to his investments, and Bitcoin is something that lacks that structure.

To Pompliano’s credit, he makes a convincing case. As too many of know, investing in Bitcoin is not always a simple feat — especially at first.

Portnoy said that he does not like that coins do not only go up — his “only go up” philosophy has been criticized before. It appears that he is approaching the asset class like he is stocks, which is the first mistake. 

The second is that he does not see the long-term trend of Bitcoin’s rise, a consistent phenomenon since its inception. Short-term volatility is indeed high, but long-term value is where most see the benefit. 

Portnoy Needs to See the Long-Term Value

There are many well-known investors who are right in criticizing the cryptocurrency market for attracting those who are looking to get-rich-quick. Or worse, scams. While that may be the case, the criticism that Bitcoin has no value and is a ponzi is incorrect. 

Bitcoin has its value as a hedge against inflation and worrying economic trends. Think of the income inequality in the world at the moment. Or perhaps the stimulus packages that have been pushed out. Most importantly, think about the hundreds of millions of underprivileged individuals who will be able to access the global economy.

It is not too strongly correlated to other asset classes, and it avoids the shortcomings of cash. Even if it is only slightly likely that Bitcoin will become digital gold, it is a chance worth taking. Provided the investment approach is reasonable, of course.

📈 Did you know: The majority of popular stock trading apps now offer access to Bitcoin and other leading cryptocurrencies.

The salvos directed at the frenzied nature of the cryptocurrency market could just as well be applied to day trading. The difference is that the stock market is more regulated, and justice is usually served. The cryptocurrency market is undergoing that change, and will soon be regulated to an appreciable degree.

What do you think of Bitcoin as a long term investment? Do you believe in its underlying effort to decentralize monetary structures? Let us know in the comments below.

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