Investor Carl Icahn thinks Bitcoin is ridiculous

The activist investor won’t go near bitcoin for three reasons. Carl Icahn in an interview with CNBC expressed his distaste for cryptocurrencies, calling them “ridiculous,”. But unlike others who were quick to write digital coins off, he admitted that in this case, the problem may lie with him.

In true curmudgeon style coupled with a dose of self-deprecation, he pointed to limited understanding and old age as two of the key reasons he’s on the sidelines. “Maybe I’m too old for them, but I wouldn’t touch that stuff,” he quipped. Separately, Warren Buffett, who similarly will only invest in companies whose business models he understands, doesn’t predict a happy ending for cryptocurrencies. Though these baby boomers aren’t buying, the millennial generation would increasingly choose bitcoin over other asset classes.

Carl’s way of trading

Meanwhile, Icahn likes to trades in undervalued corporations. So he doesn’t get the technology behind bitcoin and other altcoins. For instance, in the equity markets, if he spots a corporation that’s “poorly managed” or is a ripe candidate for a takeover, he knows what to do — swoop in, acquire enough equity shares to assert his influence on the board of directors and implement a change in direction.He’s focused on sectors such as rail, food packaging, and investment, which incidentally are migrating toward the blockchain. But with cryptocurrencies, it’s a completely different ballgame. As given the decentralized nature of the digital coin, it can trade separate and apart from the entity that issued it if needed. Ripple’s Brad Garlinghouse once told CNBC: “With respect to centralization, if Ripple (the company) went away tomorrow, the XRP ledger would continue to exist and trade.”

Irregularity in cryptocurrency

Meanwhile, Carl admitted to CNBC that he doesn’t grasp the connection between blockchain and cryptocurrencies. “I don’t like the cryptocurrencies only because, maybe I don’t understand them. How do you regulate them?” he said, pointing to the series of scandals that have rocked investors.

A lack of regulation for cryptocurrencies is Icahn’s third reason for avoiding the market, but he’s not alone. It’s is a topic that policymakers, too, are trying feverishly to solve. And he’s not suggesting that investors follow his lead. “If you like that though, maybe you understand it much better than I do,” he said.

In addition to talking cryptocurrencies, Carl also gave his opinion on the condition of the equity markets. He suggested that too much money has flown into Bitcoin and altcoins making it “overleveraged’. He said, “It’s a little bit  like ’08 when everybody was mortgage-backed securities, which were crazy.”

On the note of ETFs, Canadian regulators in recent days approved the country’s maiden blockchain ETF. Harvest Portfolio’s Blockchain Technologies ETF launches on the Ontario Stock Exchange in a week.

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