Saudi Prince Labels Bitcoin as 'Enron in the Making'

After getting bashed by Wallstreeters, Bitcoin can now add a Saudi billionaire prince to its list of detractors as Prince Alwaleed bin Talal criticized the leading cryptocurrency today.

Speaking in an interview with CNBC, the billionaire investor called Bitcoin a “thing” he doesn’t “believe in”:

“I just don't believe in this bitcoin thing. I think it's just going to implode one day. I think this is Enron in the making.”

The comparison with Enron, one of the biggest American corporations which filed for bankruptcy in 2001 after years of accounting fraud, implies that Bitcoin is a fraud that is going to burst one day.

“It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision,” he added.

Prince Alwaleed bin Talal’s comments echo what JPMorgan’s CEO Jamie Dimon said in September. However, since then many people have spoken in support of Bitcoin and cryptocurrencies.

It appears that the billionaire prince is not very informed about Bitcoin, because a comparison with Enron is not applicable in this case. Bitcoin prices are reflective of market forces and a belief in the value of anonymous, decentralized, global transactions.

What we witnessed at Enron was accounting fraud using schemes designed to hide losses and poorly performing assets from investors to keep the bottom-line appearing healthy.

The corporation eventually admitted to inflating its income for years in order to deceive investors and ended up filing for bankruptcy.

While calling Bitcoin a bubble may not be wrong, calling it a fraud is questionable – something that was conceded recently by David McKay, CEO of the Royal Bank of Canada:

“I would never call it a fraud because it’s not misrepresenting what it is. People have placed value on what it is in different ways -- and they’re fine to do that -- but it’s not fraudulent in its misrepresentation.”

Prince Alwaleed bin Talal’s Kingdom Holding, a holding company based in Saudi Arabia, has investments in Apple, Twitter and Citigroup. However, it seems the billionaire investor needs to take another look at Bitcoin.