The debate over bitcoin's role as a "safe haven" asset hit mainstream media on Tuesday, following reports that bitcoin's recent price run could be attributed to Chinese capital flight.
Speaking with CNBC on Tuesday, businessman and co-host of NBC’s “Shark Tank” Kevin O’Leary and Morgan Creek Digital’s Anthony "Pomp" Pompliano took opposing sides in the conversation. Pompliano is a well-known bitcoin bull, while O'Leary played the role of skeptic.
Over the course of the conversation, Pompliano said over half of his net worth now resides in the world's largest cryptocurrency by total value. O’Leary sought to describe the investment strategy as foolish in return.
“In any one stock, never more than 5 percent, in any one sector, never more than 20 percent,” O’Leary said. “I teach this stuff! You never go beyond concentrations of that nature! Fifty percent! Shame on you! That’s nuts!”
Responding to bitcoin’s role as a safe haven, Pompliano said the asset is negatively correlated with every other major asset class.
O’Leary’s main point concerned alternative cryptocurrencies.
“If this is really such a great idea, why is there really only one Vegas game working?" he asked.
Pompliano responded by saying no exposure to the asset class was irresponsible for financial institutions, a claim he's frequently voiced via his popular Twitter account.
CNBC’s segment on bitcoin as a safe haven was an extension of the currency discussion occurring around China. Yesterday, the United States labelled China a currency manipulator.
The U.S. announcement fell on the heels of reports between Chinese capital fleeing into alternative investments like cryptocurrencies. A recent report by CoinDesk said between $10 and $30 million Tether daily trade volume is conducted in Moscow from mostly Chinese accounts.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.