Howard Ward, the Chief Equity Officer of Growth Equities at Gabelli Funds, touched upon Bitcoin in a recent discussion on Bloomberg TV. The discussion was with Bloomberg's Tom Keene, Betty Liu and Adam Johnson:
Keene: I'm going to suggest Howard Ward is not part of the bitcoin community.
Ward: No, Tom, as a fiduciary, if I invest Client Money in Bitcoin, I would expect to be sued, and I'd be paying out a liability in dollars. It's a sign of speculative excess.
Keene: What are the young kids in the Bitcoin clan get wrong?
Ward: This isn't a real currency. This is like a digital furby doll. We had a furby doll craze 20 years ago too. People are too careless with their money. Because we've had 5 years of screaming bull markets, you get careless. In difficult times, you're less careless.
Keene: Quickly now, on Bitcoin, are we getting less careless when we see Oculus or WhatsApp.....
Ward: That's Facebook, with too much money, maybe a little bit more careless...
Johnson: How is paying $19 billion for WhatsApp or $2 billion for Oculus, which doesn't even exist yet, any more speculative than going out and buying bitcoin?
Keene: It's speculative, but to me, Howard, those are normal business transactions, what is the theoretical foundation of Bitcoin?
Ward: If I recall correctly, when Matt Miller was going through his 12 days of Christmas Bitcoin, wasn't some Bitcoin stolen right out of his hands, on TV?
Johnson: Yeah, by me actually, because I showed the private key.
Ward: What kind of a currency is that? Give me a break. In my opnion, and I'm no expert on Bitcoin, but in my opinion, it's worthlrss
Liu: OK, it's worthless. Is there a need, is there a role, for an alternative currency, that isn't the dollar, that isn't the euro, that isn't the yen, what we have right now?
Ward: You can't just invent a currency. I find the whole thing very odd.
Johnson: I'm going to play devil's advocate. You're in prison, you're trading cigarettes back and forth, you have just invented a currency.
Keene: We don't want to go back to the inefficiencies of the barter system. I would suggest the IMF has done a lot of good research on the supposed inefficiencies of euro-dollar, or zloty-euro, etc.
Liu: Has the IMF tackled Bitcoin?
Ward: There are costs involved in trading currencies. And by the way, when you're doing an FX trade, what does that carry it out to- 4 digits. So it's a very tight market, and there are certainly costs involved because there are safeguards that have to be put in place to protect a currency that is worth something.
Keene: And, again, the underlying tax authority thing is a key issue.....
This hasn't been the first comparison of Bitcoin to Facebook. About one month ago, on the perceived ability of Facebook to print unlimited amounts of cash.
