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What's With All the Bitcoin Hate?

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What's With All the Bitcoin Hate?

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It's a "fraud," "an index of money laundering," and "an Enron in the making." Are they talking about Bitcoin or the latest Mafia bust?

The "digital gold" has seen its price shoot up this year alone by about 500 percent to $5,700. But in the past few weeks, several major money movers have come out against the hot cryptocurrency.

Now, Saudi billionaire investor Prince Alwaleed bin Talal has thrown in his skeptical two cents, joining a crowd of establishment investment professionals that include JPMorgan Chase CEO Jamie Dimon and BlackRock investment group CEO Larry Fink.

"It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision of any central bank," Alwaleed told CNBC Monday.

"I just don't believe in this Bitcoin thing. I think it's just going to implode one day. I think this is Enron in the making," Alwaleed said.

Risky business?

Alwaleed also said he agrees with Dimon, who last month called Bitcoin a "fraud." Dimon has told his own traders he would fire them "in a second" if he found they were investing in Bitcoin on the side.

And just a couple of weeks ago, BlackRock's CEO called the digital currency an "index of money laundering." The coin's allowance for virtually anonymous transactions and minimal to zero fees have turned it into a favorite haven for those looking to move money around internationally and avoid their country's currency controls.

Just days ago his chief investment strategist Richard Turnill told Business Insider that "there's no inherent right or wrong price for Bitcoin" and since he's incapable of assigning it any value he's not an owner.

As the price of the digital currency rises, so does the hype, with everyone from school bus drivers to celebrities jumping on board.

However, with the inability to value the coins under classic models, and the lack of regulation or consumer protection from insider trading and market manipulating, these big name financiers are hitting the brakes hard.

Some see that as a bit of sour grapes.

Self-preservation?

"I believe they are speaking out, at least partially, out of self-interest in the sense that if bitcoin takes off, their respective institutions stand to suffer as it offers an alternative method of payment that bypasses the traditional banking system," Dr. Chen, an associate professor of finance at the University of Texas, told NBC News.

Others think it's sound investment advice, and that hating on Bitcoin might simply be a generational issue.

Patrick Lach, an investment adviser with Lach Financial and an associate professor of finance at Bellarmine University in Kentucky said that he's had only two clients ask about it as an investment vehicle — but gets several questions each semester from his students.

"Like baseball cards, comic books, and collectible stamps, Bitcoin does not produce any cash flows other than the terminal value that someone will receive after selling Bitcoin," Lach told NBC News. Just as with collectibles, someone who purchases Bitcoin is a speculator, not an investor, he said.

"There is nothing wrong with speculating in a particular asset class, but one needs to be sure that they will have enough income generated from their other investments and social security to support their needs in retirement before speculating in an asset class," he added.

Sign of the times

And then there's the "any press is good press" mentality. Just the fact that these big names feel compelled to give an opinion, negative or not, may be a sign of the cryptocoins' growing maturity.

"It is a testament to the growing importance of cryptocurrency and Blockchain that financial services industry leaders are forming views," said Salil Patroda, Executive Director of Trinity Lane Capital, a tech and cryptocurrency investor.

Euronews provides articles from NBC News as a service to its readers, but does not edit the articles it publishes.