Steve Eisman, the money manager who found fame after he successfully managed to make millions shorting subprime mortgages ten years ago, has spoken out against cryptocurrencies.
Earlier today at the CFA Institute’s yearly conference, Eisman addressed a sizeable audience questioning the need for the existence of digital currencies.
Eisman: “I Don’t Know What I’m Looking At”
During his presentation, Eisman stated that the reasons why Bitcoin and other cryptocurrencies had gained popularity were two fold. Firstly, they were a tool for people to speculate with. Secondly, that money launderers were using them to clean cash. For the Neuberger Berman managing director, these were the only reasons why anybody was even interested in the financial innovation.
He continued, questioning the rationale behind digital currencies existence in the first place:
“I don’t see the purpose of it… What value does cryptocurrency actually add? No one’s been able to answer that question for me.”
Eisman was speaking at an annual conference for the CFA Institute – a global association of investment professionals. He addressed a crowd of around 1,500 on a panel discussion in which he stated clearly that his expertise lay outside of cryptocurrencies so he hadn’t ever invested in them:
“I don’t touch it… I don’t know what I’m looking at…I have no interest”
He also stated that he had no desire to trade traditional currencies and questioned the lack of regulation in place governing cryptocurrency investors and traders:
“I don’t understand why regulators haven’t regulated it more heavily.”
Eisman initially found fame after correctly predicting the 2008 financial crisis. He was subsequently immortalised in a bestselling book by author Michael Lewis, ‘The Big Short,’ which was then turned into a movie of the same title. Actor Steve Carell played the role of Eisman. According to the man himself, Carell’s portrayal was very accurate, despite him having little to do with the making of the film.
During the panel discussion at the CFA Institute conference and an interview that followed, Eisman also addressed the current economy, the likelihood of a similar crash today, and how he knew that the U.S. housing market would tumble so spectacularly around a decade ago.
With Eisman’s outlook on cryptocurrencies, he joins a chorus of voices that includes Charlie Munger, Warren Buffet, Jamie Dimon, and various other names associated with traditional banking and financial institutions. Between the three mentioned, such insults as crypto being a ‘fraud,’ a ‘scum-ball activity,’ and ‘rat poison squared’ have been levied towards the potentially revolutionary financial innovation. Surely if there was nothing to fear from Bitcoin and the rest of the digital currencies, there would be no need for such attacks. Perhaps they doth protest too much, methinks?
Featured image from Shutterstock.