Not for the first time, Andreas Utermann, the CEO of investment management firm Allianz Global Investors, has taken a swipe at digital currencies.
In a Jan. 30 column headlined “Unencryptoed: Why investors should steer clear of cryptocurrencies,” Utermann said the distributed ledger technology lacks key features that make fiat money sustainable, including tax-raising powers, productivity in terms of trade and the ability to pay interest.
“As an asset, a cryptocurrency is a claim on nobody — in contrast to sovereign bonds, equities or paper money — and it does not generate an income stream,” he wrote. “As a currency, it is only a medium of exchange for larger-ticket items, and is simply too volatile to be considered as a numeraire or a store of value,” concluding it makes cryptocurrencies “unsuitable for investing in”:
‘This makes cryptocurrencies entirely unsuitable for investing in. As such, I would expect policy makers to take a close interest in the emergence of initial coin offerings (ICOs) that are being marketed as investments and a home for individuals’ savings.’
Read: Bitcoin is about to do something it has never done before — hint: it’s not good
This is not the first time the former Merrill Lynch
banker has poured cold water on the viability of crypto assets. In December 2017, when the price of bitcoin
was flying high, he told Bloomberg Television the cryptocurrency was “pretty valueless,” saying he would rather have something you can hold or see like the Mona Lisa painting:
Then a year later, at a panel discussion in London, Utermann said cryptocurrencies should be outlawed, adding, “I am personally surprised that regulators haven’t stepped in harder.”
Rounding out Wednesday’s post, Utermann said bitcoin mining — the process by which bitcoins are created — is a drain on the environment, so much so that society can’t afford an increase in popularity. “[I]f we consider the environmental costs of mining cryptocurrencies — where the energy consumption related to a single year’s production of bitcoin was equivalent to the annual energy consumption of Ireland — we cannot afford for them to increase in popularity.”
Read: Here’s how much it costs to mine a single bitcoin in your country
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