On Wednesday, Mark Yusko, founder, and partner at Morgan Creek Capital Management, made an appearance at CNBC: Fast Money, where he laid out his claim that Bitcoin is a much better investment option than traditional stocks as of this point.
Yusko is actually quite popular in the stock industry, particularly for correctly predicting the sell-off in stock that occurred in 2018. In this interview, he expressed his belief that the stock market is already witnessing another bear market, and things could get considerably worse as time goes on.
Speaking on his conclusion, he added, “I even wear my Bitcoin tie today for you guys. I was on this show back in December when it was $3100, and you said, ‘What do you think?’ I said, ‘Look. We’ve issued the Morgan Creek Digital crypto challenge, we will take Bitcoin over the next 10 years, starting on January 1st, and we will take anybody who wants to take the other side.’ It was a $1 million charity bet, just like the Buffett style bet. We got no takers.”
Pomp’s Bold Claim Pays Off
The bet that Yusko was referring to is the “Buffett Bet 2.0,” which was issued by Anthony “Pomp” Pompliano, his partner at Morgan Creek Capital, last year. While speaking with CNBC in December, Pompliano announced the challenge, saying that he was willing to wager $1 million on the fact that Morgan Creek’s basket of digital assets would outperform the S&P 500 over ten years, starting from January 1, 2019.
He famously invited anyone who was willing to stand on the other side of such a bet, saying that it would most likely be someone bullish on the S&P 500, or who believes that cryptocurrencies are worthless.
Yusko’s Right Again
In the latest interview, Yusko went on to point out that not taking that bet turned out to be the best thing for any would-be takers, as “while BTC is already up over 100 percent this year, the S&P is only up 14 percent.” Yusko’s comments were surely not wrong.
BTC held a price of $3,744 as of January 1, while its unit price at press time is pegged at $7,601. That’s an increase of 103 percent (according to data from CoinMarketCap).
On the flip side, the S&P 50 closed at 2,510 points on January 1, while the closing value as at May 22 was 2,856, marking a growth rate of 13.8 percent since the turn of the year (per data from the CNBC Index). If you thought about betting against Pomp, you’d be pretty much in the hole already.
After pointing out this disparity, Yusko added, “I think going forward from here, even over the next year, over the next 10 years, it’s not going to be close. Bitcoin is a great diversifying asset, it has a very low correlation, it should be in anybody’s portfolio.”
Morgan Creek’s Crypto-Loving Partners
Pompliano recently had to come out to make a point about cryptocurrencies. Last Tuesday, he was a guest on CNBC’s Squawk Box, where he engaged in a somewhat heated argument with Kevin O’Leary, chairman of investment firm O’Shares ETFs
O’Leary wasted no time in trashing Bitcoin, going as far as calling is “garbage” and “useless.” Despite the noticeable uptick in its prices last week, Bitcoin didn’t seem to impress the investor. He questioned the value of Bitcoin, claiming that it is “basically a digital game” without any intrinsic value.
In his defense, Pompliano pointed out that that Bitcoin was going through a bit of a rough start, just as it is with every other disruptive technology in the world. He added that currencies work with a “belief system,” and BTC is functioning as money.
“So, for the US dollar, the only reason you and I use it is because we believe it has value. So I give you a dollar, and you give me a good or service in exchange. Bitcoin has value because the two people who exchange it believe it has value. And what we’re seeing is the volume, look at people using it,” he confirmed.