Famed Short-Seller Chanos Warns Against Bitcoin

Renowned short seller Jim Chanos is the latest noted investor to rail against cryptocurrencies like bitcoin, saying investing in the volatile asset would be a disaster in the event of a catastrophe for the markets.

Chanos, a managing partner of Kynikos Associates who correctly predicted Enron’s downfall, said in an interview with Institute for New Economic Thinking that he believes the skyrocketing prices in cryptocurrencies was driven by excessive risk-taking.

“This is simply a security speculation game masquerading as a technological breakthrough in monetary policy,” Chanos said, according to the report. He called bitcoin a “libertarian fantasy” as so many of its supports hail its decentralized and anonymous nature as among its strengths in the currency market. And he said it’s wrong to believe cryptocurrencies would ever replace fiat currencies. (See also: Square Seen Rising Higher on Bitcoin, M&A.)

“And if you say, well, fiat currency is going to bring…