[INTERVIEW] American investor Rogers predicts gloomy future on cryptocurrencies

Lim Chang-won Reporter Posted : 2018-01-11 13:31 Updated : 2018-01-11 13:31
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[Image provided by Jim Rogers]


SEOUL, Jan. 11 (Aju News) -- Jim Rogers, a prominent American investor, predicted "sustainable" growth in the global digital currency market, but he painted a gloomy picture on its future saying cryptocurrencies would eventually become state money controlled by government officials.

"We do know that the world has a money problem, and we do know the internet is changing everything," Rogers said in a video interview from his residence in Singapore, pointing to the widespread use of digital payment especially in China.

However, he warned that digital currencies would be absorbed into state money after all because of government control.

Digital currencies, including Bitcoins, have become a controversial issue in the world's financial industry, and South Korea has become a hotbed for speculative investments mainly because digital currencies are not recognized as financial products.

Now, financial regulators in Seoul are taking steps to prevent the "serious" side effects of excessive attention to cryptocurrencies, warning of strong regulations on transactions and a ban on anonymous virtual accounts.

"The internet is going to change money and everything we know," Rogers said, adding the change in the digital money market would be "sustainable".

The billionaire investor, who co-founded the Quantum Fund and serves as chairman of Rogers Holdings and Beeland Interests, said people in the cryptocurrency industry cannot beat government regulators who want to maintain control and have "more guns than everybody else".

"So if the government wants to control money, they will. it's not good for the world that governments have so much power because governments certainly don't know what they are doing but in the end, they have the guns," he said.

"It may be government internet money in the end," Rogers said.

His view was shared by Berkshire Hathaway CEO and investor Warren Buffett, who warned that cryptocurrencies could face would come to "a bad ending". "We'll never have a position in them," Buffett told CNBC's "Squawk Box". "I can say with almost certainty that they will come to a bad ending."

Their prediction appeared to have gained ground. This week, South Korean police and tax officials launched a probe into some cryptocurrency exchanges in a crackdown that followed strong government steps to curb excessive demand for digital money especially among students, housewives and other ordinary people.

The crackdown dampened sentiment among investors and caused a sharp fall in cryptocurrency prices at South Korean exchanges.

Cryptocurrencies use blockchain technology, a crucial element in the Fourth Industrial Revolution, which was seen by Rogers as a good place to invest because he thinks new technology has always been "a great investment if you get it right".

Just because of his insufficient knowledge, Rogers has invested a "very small" amount of money in the sector. "I am not smart enough to understand it, and I know when I invest in something I do not understand, I nearly always lose money, but if you understand, it's a fantastic place to invest."

Like garbage that can be a good place for investment, any place is good for investment "if you find the right people with the right products", Rogers said. "And of course, new technology always throughout history has been a great investment if you get it right."

(This interview has been arranged by Kim Hoi, a high school student who operates " Kim's people", a student media, and serves as an honorary reporter for Aju News Corporation.)