Bitcoin price (BTC): Billionaire investor calls cryptocurrencies “unfounded fad”

Billionaire investor Howard Marks has made some harsh comments about bitcoin (BTC) and its competing cryptocurrencies.

In a memo to clients, the co-chairman of Oaktree Capital touched upon the cryptocurrency sector, calling digital currencies a fad and even a pyramid scheme.

“In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” he said.

Marks, whose firm has $99 billion of assets under management, is famous for predicting the burst of the dotcom bubble and the 2008-2009 financial crisis. In his most recent memo he found similarities between the current cryptocurrency boom and events like the dotcom bubble, the Tulip Mania of 1637 and the South Sea bubble of 1720.

"Serious investing consists of buying things because the price is attractive relative to intrinsic value," he wrote in the letter. "Speculation, on the other hand, occurs when people buy something without any consideration of its underlying value or the appropriateness of its price."

The parallel with the dotcom bubble seems appropriate, as the Internet boom of the late 1990s and early 2000s is a perfect example of how the enthusiasm surrounding a hot emerging technology can lead to overinflated and unrealistic valuations. It should be noted, however, that companies like Amazon.com and eBay.com, which survived the subsequent crash, went on to become some of the largest and most powerful companies in the world.

Bitcoin has remained stable in today’s session, trading above the $2,550 for most of the day. As of 16:45 BST, the bitcoin price stood at $2,568. The coin has gained 4.7 percent over the past 24 hour, according to data from Coinbase-operated exchange GDAX.