Economist David Rosenberg: "Bitcoin is closer to a lottery ticket than an investment"

Bitcoin and other cryptocurrencies are so volatile and difficult to value that buying them is closer to gambling than investing, according to the famous economist David Rosenberg, according to Business Insider.

According to the founder and president of Rosenberg Research, stocks represent a right to a company's future cash flows, bonds and savings accounts pay interest, while commodities have industrial uses and demand for them can be modeled using economic data.

"These things are real," Rosenberg wrote in a note. "Do you want to get rich by believing in crypto "currencies"? Then apply a barbell strategy to your lottery ticket holdings."

Barbell is an investment approach according to which the best way to find a balance between risk and reward is to build a portfolio that includes very risky assets and assets with a high degree of safety, with no risky assets and average potential returns.

The former chief economist for North America at Merrill Lynch claims that Bitcoin and other tokens are based on the "bigger sucker" theory. In other words, people buy them not because they have any intrinsic value, but because they hope to sell them at a profit to someone even cheaper.

Rosenberg's views come after US regulators approved the launch of spot Bitcoin ETFs last week. But, the economist noted that the price of the most popular cryptocurrency fell from a two-year high of $49,000 last Thursday to $44,000 by the evening of the following day.

"Who needs this volatility in their life? Certainly not me," said the economist. This is not the first time that Rosenberg has criticized cryptocurrencies. Last year, the economist pointed out that prices in the crypto market can fluctuate by 20% or 30% in a few weeks. "Why put something like that in your portfolio unless you're a gambler?" he pointed out.

In addition, he emphasized the difficulty of valuing an asset that, unlike a company or a bond, does not bring a return to investors. "I don't know how to rate him," said Rosenberg quoted by Business Insider.