Charles Bobrinskoy warns of speculative Bitcoin pump

Ariel Investments’ Charles Bobrinskoy warned that Bitcoin is a momentum-driven bubble and predicted an imminent price crash as regulatory and market sentiment changes.

Bobrinskoy issued this harsh warning about Bitcoin (BTC), labeling the cryptocurrency a “get rich quick scheme” based on momentum rather than intrinsic value.

Speaking to CNBC’s The Exchange, Bobrinskoy expressed concerns about Bitcoin’s dependence on minimal regulatory oversight, arguing that this leaves Bitcoin vulnerable to crashing when investor sentiment changes.

Bobrinskoy noted that Bitcoin’s appeal stems from its lack of regulation, which allows for large, anonymous transactions.

He also highlighted its association with criminal activity and its departure from traditional Know Your Customer rules as risks to the wider financial system. He rejected the initial narrative of Bitcoin as a means of transaction, adding that its current position as a store of value lacks long-term sustainability.

Bitcoin’s price increase is purely speculative

Bobrinskoy, who runs Ariel’s value-focused investment strategy and has decades of experience in investment banking, attributed Bitcoin’s recent price gains to speculative enthusiasm rather than fundamental economic fundamentals.

He predicted a sharp decline in Bitcoin’s value once its momentum fades, citing concerns that the cryptocurrency is weakening the US dollar and exposing investors to significant risks.

“What that means is that it’s up because it’s up, and if it starts to lose momentum it’s going to go down dramatically, and that’s going to happen,” he said.

Known for its disciplined approach to value, Ariel Investments has long focused on traditional stocks. Bobrinskoy’s remarks reflect ongoing skepticism in traditional financial circles about the sustainability of cryptocurrencies without stronger regulatory frameworks.