(Bloomberg) -- When Rob Arnott became aware of Bitcoin in 2013, he found it fascinating -- just not enough to place a huge bet on it.
“As a libertarian, I thought, this’ll give central bankers a so-called run for their money. It’ll be fun to watch,” Arnott, founder and chairman of Research Affiliates and one of the best-known fundamental investors, said on the latest “What Goes Up” podcast from Bloomberg News.
He debated putting $100,000 toward the then-nascent cryptocurrency, which at the time was trading in the neighborhood of $200. “I said, nah, I don’t buy things I don’t understand. I’ll just buy one Bitcoin,” he recalled. “Today, if I bought the $100,000, it would be worth about $25 million.”
Emerging out of the ashes of the financial crisis, Bitcoin was created as a bypass around the banks and government agencies mired in Wall Street’s greatest calamity in decades. At first, it was slow to break through, muddied by a slew of scandals. But it’s slowly turned into one of the best-performing assets over the past decade. Its run since its inception a little more than 10 years ago has been so hefty that it’s left skeptics and fans equally aghast. It’s up some 340% over the past year alone.
The world’s largest digital asset reached a new record Tuesday, touching $68,513 as investors seek out hedges against inflation. The total value of digital tokens has reached roughly $3.1 trillion, according to some measures.
Arnott, who is known for his deep research into asset bubbles, also discussed what he sees going on with markets and offers up a theory on the only thing that can pop bubbles. Click here to listen to the full podcast, and subscribe on Apple Podcasts, Spotify or wherever you listen.
©2021 Bloomberg L.P.