Bitcoin is a ‘pyramid scheme,’ says an economist

Bitcoin • January 2, 2020, 2:00AM EST

Tendayi Kapfidze, chief economist at Nasdaq-listed online lending marketplace Lending Tree, has said that bitcoin is a “pyramid scheme.”

“You only make money based on people who enter after you,” Kapfidze told Yahoo Finance in an interview published Thursday. He added that bitcoin has “no real utility.”

“They’ve been trying to create a utility for it for ten years now. It’s a solution in search of a problem and it still hasn’t found a problem to solve,” said Kapfidze.

Bitcoin has earned many monikers in its 11 years of existence - a "scam" (by Bill Harris, founding CEO of PayPal); "rat poison" (by Berkshire Hathaway vice chairman Charlie Munger) and "rat poison squared" (by billionaire investor Warren Buffett), among others.

Yet, a recent report from Bank of America names bitcoin the single best investment of the last decade. The report said if you invested $1 in bitcoin at the start of 2010, it would now be worth more than $90,000. Last year alone, the value of one bitcoin rose more than 85%, making it one of the top-performing financial assets in the world.

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Yogita Khatri is a senior reporter at The Block and the author of The Funding newsletter. As our longest-serving editorial member, Yogita has been instrumental in breaking numerous stories, exclusives and scoops. With over 3,000 articles to her name, Yogita is The Block's most-published and most-read author of all time. Before joining The Block, Yogita wrote for CoinDesk and The Economic Times. You can reach her at [email protected] or follow her latest updates on X at @Yogita_Khatri5.