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Dennis Gartman says 'stay the heck anyway from bitcoin,' but other investors see opportunity

  • "It makes no sense whatsoever. I won't trade it. I won't be long of it. I won't be short of it," says Dennis Gartman.
  • But many investors, on Main Street and Wall Street, disagree.
  • Ark Investment Management founder and CEO Catherine Wood says bitcoin is "so much bigger an idea than even Apple, which is a pretty big idea."

Ever since the recent bitcoin craze took hold, closely followed investor Dennis Gartman has made no secret of his disdain for the cryptocurrency.

On CNBC in August, he called bitcoin a "punter's dream."

In November, he said it's for "criminals" and "millennials."

Earlier this month, he admitted new bitcoin futures lend some "legitimacy," but said it's a "modern day tulip bulb mania."

The founder and publisher of The Gartman Letter, a four-decade veteran of the financial markets, told CNBC's "Worldwide Exchange" on Friday that investors should "stay the heck anyway from bitcoin."

Gartman, who made his bones on Wall Street as a commodities trader, said: "It makes no sense whatsoever. I won't trade it. I won't be long of it. I won't be short of it."

While he said he understands "the rationale and the wisdom of the blockchain," the online ledger technology underlying bitcoin, Gartman said it makes no sense to him to have "some sort of an asset that has no real asset value behind it."

"It makes no sense whatsoever. I won't trade it. I won't be long of it. I won't be short of it." -Dennis Gartman, founder of The Gartman Letter

But many investors, on Main Street and Wall Street, disagree.

Ark Investment Management founder and CEO Catherine Wood, an early believer, told CNBC on Thursday that bitcoin is "so much bigger an idea than even Apple, which is a pretty big idea."

Roger McNamee, co-founder of venture capital powerhouse Elevation Partners, also said Thursday on CNBC that bitcoin might be all hype, but it could withstand a crash and become legitimate, particularly if it sees enough gains in 2018.

Bitcoin started 2017 at around $1,000 per unit on the Coinbase platform. Earlier this month, it surged to a record high of more than $19,000. On the final trading day of the year, bitcoin was around $14,200, a whopping 1,300 percent gain since the beginning of January.

This month, bitcoin futures trading began on the CME and Cboe, bringing a layer of government regulation over the contracts, and a number of brokerages into the digital currency business. But the cash market for bitcoin is basically unregulated.

"[Bitcoin is] so much bigger an idea than even Apple, which is a pretty big idea." -Catherine Wood, Ark Investment Management CEO

By no means is Gartman alone in his warnings about bitcoin.

J.P. Morgan Chase Chairman and CEO Jamie Dimon in September famously called bitcoin a "fraud" that will eventually blow up. In early December, Dimon did seem to somewhat soften his tone on cryptocurrencies but still said he remains doubtful the surge can last.

Major commercial banks and government central banks have been loathe to embrace bitcoin.

Even outgoing Federal Reserve Chair Janet Yellen finally weighed in on cryptocurrencies. In her post-December-policy-meeting news conference, she called bitcoin a "highly speculative asset."

Despite his reservations, Gartman said central banks will embrace bitcoin "only because they're going to be forced into doing it."

But the 67-year-old Gartman, who at this point only trades his own money, doubts whether bitcoin will be used on a widespread basis as a means of payment. "Will bitcoin ever be used to buy houses, cars, to trade government securities, to pay taxes, I have my doubts. Likely not in my lifetime," he said.

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