Jeremy Grantham, a veteran investor and vocal critic of asset bubbles, has reiterated his skepticism towards bitcoin, forecasting its gradual descent into obsolescence over the coming decades. The co-founder of investment firm GMO, renowned for his prescient market calls, articulated his views on CNBC’s “Squawk Box,” labeling bitcoin a “useless, speculative” instrument devoid of intrinsic value.
Grantham highlighted that bitcoin has failed to demonstrate superior performance even within a bullish market environment and questioned its practical utility. “Over years and years, decades and decades, it will dwindle away, I suspect — not with a bang, but a whimper,” he stated. “It’s not a stable store of value — it just halved … for no particular reason in a strong economy, so you can’t depend on it in that way.”
He drew a contrast with gold, noting that the precious metal has consistently delivered solid returns over similar periods, even after experiencing pullbacks from its peak valuations. This comparison underscores Grantham’s emphasis on fundamental value and historical performance as key indicators of an asset’s long-term viability.
Beyond its speculative shortcomings, Grantham argued that bitcoin offers no tangible real-world utility. “People don’t use it to make serious trades, they don’t use it to buy their dinner and pay at the supermarket. … What it does is allows crooks to move money around,” he asserted. This critique points to a fundamental disconnect between the narrative of bitcoin as a revolutionary financial tool and its actual adoption in everyday commerce and legitimate financial transactions.
The cryptocurrency market has been defined by bitcoin’s notorious cyclical bear market crashes, with each cycle seeing the digital asset plummet by at least 70% from its all-time highs. Currently trading significantly below its October peak, the price volatility of bitcoin raises significant questions about its suitability as a reliable investment vehicle, particularly for risk-averse investors. Grantham’s perspective aligns with a growing sentiment among some financial analysts who believe that the speculative fervor surrounding cryptocurrencies may overshadow their limited practical applications, potentially leading to a revaluation based on underlying utility rather than market sentiment.
The ongoing price slump, which has seen bitcoin fall approximately 52% from its previous highs and hover below the $60,000 mark, has fueled speculation about its future trajectory. While some proponents view these downturns as opportunities for accumulation, Grantham’s assessment suggests a more pessimistic outlook, predicting a slow erosion of value rather than a swift collapse. This long-term perspective is crucial for investors to consider, as it emphasizes the importance of fundamental analysis and the need for assets to demonstrate sustainable value creation beyond speculative trading.
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