Oaktree Capital’s Howard Marks has heated up to bitcoin. He confessed that he had a knee-jerk reaction to the cryptocurrency and dismissed it too soon.

Since then, the cost of bitcoin has increased significantly as need for the cryptocurrency skyrockets amongst retail and institutional investors. Howard Marks Modifications Stance on Bitcoin Howard Marks, co-founder and co-chairman of Oaktree Capital Management, discussed bitcoin during an interview with CNBC last week.

As institutional investors end up being increasingly interested in bitcoin and major companies have revealed their financial investments in the cryptocurrency, Marks stated: “I’m opening my mind on bitcoin. I was ‘knee-jerk’ doubtful.” He clarified:

While bitcoin doesn’t have an intrinsic worth, the same can be stated of the dollar and lots of, many other things that have worth like paintings and diamonds. I’ve been more sensitized to the supply-demand case.

The Oaktree Capital founder similarly told The Korea Economic Daily on March 15 that back in 2017, when bitcoin increased in appeal, he was “really dismissive of it since it doesn’t have intrinsic worth.” He added that he has been studying and discovered that “people make the case for bitcoin … on the basis of supply and demand.”

He kept in mind that the supply of bitcoin is fixed, “unlike the dollar, which can be printed in boundless amounts,” adding that “the demand [for bitcoin] is growing because more individuals are interested in it.” However, he pointed out that “it’s a little circular since people desire it due to the fact that it’s going up in rate and it’s increasing in price because people desire it. That’s circular.”

Checking out “independent reasons why people desire it,” Marks called some benefits of bitcoin. “The argument is that it’s extremely useful to be able to trade immediately, you can trade 24 hours … seven days a week.” He compared it to banks, specifying that with banks you can’t send out a wire whenever. In addition, he said: “It’s personal. Nobody understands about your holding but you, the federal government can’t know, etc. Nobody can steal it from you. It’s much better than an emerging market currency.” He concluded:

So there’re all these arguments about why individuals want it. And the need grows and the supply doesn’t grow, then the economics tell us [that] the rate goes up.

He then pondered if those reasons suffice to justify the price of bitcoin. He kept in mind that the price of BTC had to do with $5,000 when he dismissed it in 2017, and now it’s above $50,000. “So the people who purchased it at $5,000, up until now they look right,” he stated.

Chart showing the rate of bitcoin from 2017 to today. Source: markets.Bitcoin.com Currently, the price of bitcoin stands at$56,106 according to markets.Bitcoin.com. This represents a 1,022% increase from its rate when Marks dismissed it.

Meanwhile, a growing number of institutions are getting into bitcoin. Elon Musk’s Tesla, for example, has invested $1.5 billion in the cryptocurrency and recently started accepting BTC as a method of payment for its vehicles. Goldman Sachs has actually relaunched its BTC trading desk after seeing big need for bitcoin from institutions. Morgan Stanley recently said it will offer rich customers access to bitcoin funds. There are now three bitcoin ETFs selling Canada and major companies, including Fidelity and JPMorgan, have used with the U.S. Securities and Exchange Commission (SEC) to launch bitcoin-based products.

Discussing his initial, dismissive reaction to bitcoin, Marks confessed, “now I’ve discovered just how much I do not know, so you should not talk about things you do not understand about.” He repeated:

My initial reaction was a knee-jerk reaction without info and that’s not a great way to behave.

What do you think about Howard Marks’ brand-new bitcoin stance? Let us know in the comments area below.

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