Oaktree Capital founder Howard Marks has bitcoin
on his mind.
Marks, who called bitcoin, the digital coin up over 350%
this year, a “fad” in a July memo, has warmed up to it after
receiving backlash from the cryptocurrency community.
revisited his thoughts on the digital coin in a wide-ranging
memo sent out to clients on Thursday. The long and short of
the note: Marks has changed his mind, but he still has
Marks concedes he might have been too quick to dismiss the idea
that bitcoin can be considered a currency akin to the US
“What bitcoin partisans have told me subsequently is that
bitcoin should be thought of as a currency – a medium of exchange
– not an investment asset,” Marks wrote. “Given that the
evolution of bitcoin is so topical, I think further discussion is
After exploring the key characteristics of a currency, Marks
concedes that bitcoin does, in fact, share characteristics
of money. Specifically, its use as a form of legal tender and a
store of value.
“So my initial bottom line is that I see no reason why
bitcoin can’t be a currency,” Marks said.
But this doesn’t mean Marks is completely on board with the
bitcoin trade. According to Marks, just because bitcoin
could be considered a currency, doesn’t mean its not in a
speculative bubble. Here’s Marks (emphasis
Being willing to agree that Bitcoin may become an
accepted medium of exchange is not the same as saying you should
buy it now to make money. Think about the fact
that the price of Bitcoin has risen more than 350% so far this
year and 3,900% in the last three years. To the degree
people argue that Bitcoin is a currency, then (a) why is it so
volatile? and (b) is that desirable? You might want to
consider whether a real currency can do that, or whether
speculative buying is determining Bitcoin’s price. And
whether what’s gone up can come down.
That said, Marks, a self-professed “bitcoin dinosaur,” is
open to further debate.
“I’m willing to be proved wrong,” he