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Prince Alwaleed says bitcoin will implode: 'Enron in the making'

Fred Imbert
Saudi billionaire investor Prince Alwaleed bin Talal told CNBC on Monday that bitcoin will implode one day.

Saudi billionaire investor Prince Alwaleed bin Talal said Monday that bitcoin will "implode" one day.

"It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision" of any central bank, Alwaleed said in an interview on CNBC's "Squawk Box."

"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," Alwaleed said.

The billionaire investor was referring to the massive accounting fraud that took Enron, a U.S. energy-trading and utilities giant, into bankruptcy in late 2001.

Alwaleed runs Kingdom Holding, a massive conglomerate whose investments include CitigroupApple and Twitter. The company is based in Riyadh, Saudi Arabia.

Digital currency bitcoin has surged about 500 percent this year and  hit an all-time high above $6,100 on Saturday. Bitcoin traded 2 percent lower around $5,847 Monday, according to  CoinDesk.

Bitcoin has shaken off an August split into bitcoin and bitcoin cash, and a Chinese crackdown in September on digital coins.

The massive gains are fueled by growing interest from some institutional investors and Japanese investors. Trading in Japanese yen accounted for about 62 percent of total bitcoin trading volume Monday, according to industry website CryptoCompare. Trading in U.S. dollars accounted for roughly 21 percent, the site showed.

But most major investors remain skeptical of bitcoin.

Alwaleed said Monday he agrees with JPMorgan Chase CEO Jamie Dimon, who last month called bitcoin a "fraud" that will eventually blow up.

BlackRock CEO Larry Fink has also called the digital currency an "index of money laundering" for its ability to facilitate illegal commerce on the internet.

However, JPMorgan and other financial institutions are investing in blockchain, the technology that enables bitcoin to transfer value nearly instantly without a third-party intermediary.

The development of digital currencies has also spawned the growth of token sales, or initial coin offerings, which have taken off this year. The coin sales have raised $3.04 billion, according to financial research firm Autonomous Next.

Jordan Belfort, the infamous "Wolf of Wall Street" penny stock broker, told The Financial Times in an interview published Sunday that initial coin offerings are the "biggest scam ever."



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