Bitcoin, Cryptos Closer to Lottery Tickets Than Investments: Rosenberg

• Veteran economist David Rosenberg says buying bitcoin is more like gambling than investing.
• Stocks, bonds, cash, and commodities are much easier to value than cryptocurrencies, he says.
• Bitcoin is volatile, as shown by its price move after the SEC decision last week, Rosenberg says.

Bitcoin and other cryptos are so volatile and hard to value that buying them is closer to gambling than investing, David Rosenberg says.

Stocks are a claim on a company’s future cash flows, bonds and savings accounts pay out interest, while commodities have industrial uses and demand for them can be modeled using economic data, the Rosenberg Research president said in a morning note on Monday.

“These things are real,” Rosenberg wrote. “You want to get rich by believing in crypto ‘currencies?’ Then barbell your holdings with lottery tickets. Seriously — let’s get a grip.”

The former chief North American economist at Merrill Lynch argued that bitcoin and other tokens are examples of the “greater fool” theory at work. In other words, people buy them not because they’re intrinsically worth anything, but because they hope to sell them for a profit to someone even more foolish.

Rosenberg’s diatribe followed US regulators’ approval of nearly a dozen spot bitcoin ETFs last week. The veteran economist noted the most popular crypto tumbled in price from a two-year high of $49,000 last Thursday morning, to $44,000 by Friday evening.

“Who needs this degree of volatility in their lives?” he queried. “Not me, that’s for sure.”

Rosenberg’s crypto-bashing echoes the critique he made to Business Insider last year. He underscored that token prices can swing 20% or 30% within weeks.

“Why introduce that to your portfolio unless you’re a gambler?” he questioned at the time.

Moreover, he emphasized the difficult of gauging the worth of an asset that, unlike a business or a bond, doesn’t yield a return for investors.

“I don’t know how to value it,” he said. “Therefore, as they say on ‘Shark Tank’ — ‘I’m out.'”