Jean-Pierre Verster, Hedge fund expert and founder of Protea Capital Management has joined the league of those who are critical of digital currencies.
The hedge fund expert recently added his voice to the growing calls of mainstream investors, who have spoken ill of Bitcoin and other cryptocurrencies. In Jean-Pierre’s words, cryptocurrencies lack intrinsic value.
While speaking in a recent interview with BizNews, Jean-Pierre shared his thoughts on private digital currencies likening them to a Ponzi scheme.
According to the hedge fund expert, cryptocurrencies have elements of a Ponzi scheme where that prices go up all of a sudden, then come crashing down. Jean-Pierre noted that this has informed his decision not to invest in them.
Speaking on blockchain technology, Jean-Pierre praised the utility of the innovation asserting that it has several applications including being used to create open ledgers where transactions can be securely stored without any form of alteration or fiddling from a third party.
Jean-Pierre attributed the reason for the widespread adoption of cryptocurrencies to challenges like hyperinflation and forex restrictions from governments. Jean-Pierre questioned the application of blockchain technology to cryptocurrencies.
The hedge fund expert also warned crypto investors about an imminent and inevitable crash of the crypto market after prices have rallied to the top. Earlier in April, Jean-Pierre had expressed the same opinion about crypto assets.
The latest comments just go to affirm his position on digital currencies. Citing reasons why he dislikes cryptocurrency, he argued that crypto investors often have to rely on a third party to determine the value of each asset.
Despite Jean-Pierre’s comment, South Africa has witnessed unprecedented adoption of cryptocurrencies in the last few years though most investors’ first encounter with Bitcoin and others was through scams.
South Africa currently ranks among the top 10 emerging markets with the highest adoption, according to Chainalysis Global Cryptocurrency Adoption Index 2021
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