Jim Chanos Compares Bitcoin To Beanie Babies: 'It's A Speculative Mania'

As far as Jim Chanos is concerned, his hedge fund is different than most.

Kynikos investments come not from the budding minds of rookies but from the time-tested partners, themselves. That’s because “the process is not only analytical … there’s pattern recognition, and that’s the stuff you can’t teach.”

Pattern recognition is how Kynikos came to short Valeant Pharmaceuticals Intl Inc VRX, a firm with a Tyco International-esque story. “We had seen this before,” Chanos said Wednesday during a talk in Detroit, Michigan.

Don’t Trust The Word On The Street

It’s also how Chanos, a notable short seller, came to spurn the bitcoin trade.

If Aunt Kathy’s investment enthusiasm preceded the dot-com bubble, and his porter’s Miami condo ventures preceded the real estate bubble, history warrants suspicion of the bitcoin play his driver is suddenly touting.

“When your doormen are putting up buildings, you’ve got to maybe be a little careful,” he said.

The Bitcoin Bear

Chanos is not a bitcoin believer, but he has no shorts on the currency, either.

“We have no edge there,” he said. “It’s a speculative mania. It’s Beanie Babies.… The technology is real, but the ICOs are questionable.”

In fact, the initial coin offerings, recently pursued to finance ventures more easily than through traditional routes, sound alarms for the fraud-exposing market detective.

“There will be great successes obviously, and there will be lots and lots of people who lose lots of money, and a lot of money will be stolen, and there will be a lot of fraud,” he said.

Related Link:

Jim Chanos Adds To Tesla Short, Thinks Musk Will Step Down By 2020

The Most Important Week In The History Of Bitcoin

Image credit: Dominique Godbout, Flickr