Billionaire investor Howard Marks has become considerably more open-minded towards cryptocurrency, in particular Bitcoin, in the recent years. Initially, in 2017 he published a memo to Oaktree Capital Management clients calling cryptocurrency "nothing but an unfounded fad (or perhaps even a pyramid scheme)". A series of conversations with his son Andrew led Howard to soften his views on the subject. His son is a well-known “Buffet nerd” who invested in Bitcoin when it only cost $5,000 to $6,000.

What Howard realized was a macro-driven change in the economy. Central banks around the world have been cutting interest rates for the past 40 years after the global economic crisis in 2008. This, according to Marks, is the single most important economic event of the past 45 years. The US Federal Reserve’s decision to keep interest rates at zero for 7 years is the reason why cryptocurrencies have started to gain traction. These investments are fueled by an anti-bank sentiment – the distrust of traditional banking systems. For example, people in countries with weak or limited access to banking institutions can keep their money secured and protected if they chose to invest in a cryptocurrency.

Despite his long-term skepticism, Howard Marks can recognize the value of cryptocurrency investments in certain opportunities. What he appreciates is Jerome Powell's “reasoned but resolute” view to setting expectation towards inflation. In other words, Marks is confident that inflation won't need an extreme push from the Federal Reserve and it will naturally balance, unlike the global crisis from the '70s. To conclude, he states that Bitcoin is, in fact, the global leader in crypto and a viable alternative to the traditional banking system.



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