Gary Shilling Calls Bitcoin a “Black Box,” Says He Won’t Invest in It


Legendary investor and analyst Gary Shilling has explained why he won’t be investing in Bitcoin in a recent interview with Business Insider. Shilling even called Bitcoin a “Black Box.”

Gary Shilling is not the first traditional investor who made negative commentary on Bitcoin. Charlie Munger and Warren Buffet both echo the same sentiments regarding Bitcoin as a currency and a form of investment.

The market crash in 2018 and ongoing bear market definitely hasn’t improved the nay-sayers opinion on Bitcoin.

One of the major reasons why Shilling is not in favor of Bitcoin is that Satoshi Nakamoto, the man behind the cryptocurrency, is an anonymous person. According to Shilling, this means lack of transparency for the technology.

“I’m just very suspicious of things that are not very transparent… And if I can’t understand it, I don’t want to invest in it,” Shilling said.

Moreover, he also made a parallel comparison between the price performance of Bitcoin and the South Sea Bubble in the 1700s. South Sea Company’s stocks were traded for around 1,000 British pounds and then dropped to zero in 1720.

Shilling cited one event that could lead to Bitcoin’s crash—when Satoshi Nakamoto, who allegedly owns 980,000 Bitcoins, sells his currency holdings.

Although there are many traditional analysts who call Bitcoin a scam, there are also some who are more open to the potential of the nascent technology.

For instance, Allianz chief economic advisor Mohamed El-Erian expressed his positive opinions on the future of cryptocurrencies at a conference last November. He said that increased adoption and the influx of more institutional investors are some reasons why cryptocurrency will be here for the long run.

“I think cryptocurrencies will exist, they will become more and more widespread, but they will be part of an ecosystem. They will not be dominant as some of the early adopters believed them to be,” El-Erian explained. He further said that cryptocurrencies are unlikely to replace fiat money any time soon.

The former co-chief investment officer of PIMCO even disclosed that he has $400 Bitcoin holdings, which is part of an experiment to test how the buying and selling of the cryptocurrency works.