One of Canada’s most prominent mining executives says the move toward bitcoin investing has reached “a mania”.
Franco-Nevada (FNV.TO) chairman Pierre Lassonde told BNN in an interview Wednesday that he has no interest in investing in bitcoin, because he doesn’t see an empirical way to measure its worth.
“What is the value of bitcoin? Unplug your computer and tell me what it’s worth. It’s a mathematical equation in space,” Lassonde told BNN.
“At the end of the day, it’s a mania.”
Bitcoin reached a record high of US$19,666 on Sunday, but has since tumbled nearly $4,000. The cryptocurrency traded as low as US$15,800 on Wednesday.
In addition to price volatility, Lassonde warned the energy consumption needed to mine bitcoin may be unsustainable.
“They’re already using – I read somewhere – something like four per cent of the world’s electricity,” he said. “It’s huge. If you go exponential on that, how much electricity can it use before the thing goes bust?”
When asked about the statement from prominent bitcoin investor Cameron Winklevoss that the cryptocurrency could soon be a “multi-trillion dollar asset,” Lassonde said that it’s possible, but made a cautious comparison.
“It’s the same as the tulip bulb mania of the 17th century,” Lassonde said. “Can it go higher? Absolutely. Can it reach the kind of value that they’re talking about? Maybe, I don’t know.”
At the end of the day, Lassonde believes bitcoin has more in common with the world of 'Avatar' than it does with gold.“The inventor of bitcoin used the gold world – if you want - to frame what is essentially a mathematical equation. Except, instead of naming it ‘bitcoin,’ you should have called it ‘unobtainium.’”