Jeremy Grantham predicts bitcoin's decline as it sits 52% off peak

Bitcoin is a "useless, speculative mechanism" that will fade into irrelevance over the coming decades, billionaire investor Jeremy Grantham said, as the largest cryptocurrency trades about 52% below its October all-time high.

"It will dwindle away, I suspect — not with a bang, but a whimper," Grantham, co-founder of investment firm GMO who called both the 2000 dot-com crash and the 2008 housing collapse, said on CNBC's "Squawk Box" on June 27. "It's not a stable form of value — it just halved for no particular reason in a strong economy, so you can't depend on it in that way."

Bitcoin changed hands near $58,000 as of 14:30 UTC, down about 52% from its record above $108,000 reached in October, according to CoinGecko data. The decline has unfolded even as the U.S. economy expanded at a 2.8% annualized rate in the first quarter, underscoring Grantham's argument that the asset lacks the fundamental anchors that support traditional investments. Gold, by contrast, has gained about 18% over the same period, trading near $2,350 an ounce.

Grantham dismissed the notion that bitcoin serves any practical economic function, arguing it is neither a medium of exchange nor a reliable store of value. "People don't use it to make serious trades, they don't use it to buy their dinner and pay at the supermarket," he said. "What it does is allows crooks to move money around without leaving a trace." He also criticized bitcoin's proof-of-work consensus mechanism, calling it "proof of unnecessary work" that "shouldn't be worth a bucket of warm spit."

The comments from Grantham, whose track record of identifying asset bubbles gives him outsized influence among institutional investors, could reinforce skepticism toward bitcoin among traditional finance allocators. Bitcoin has suffered at least four drawdowns of 70% or more from peak to trough across its history, and the current cycle's decline has already wiped out more than $600 billion in market value from the October high. The next key support level sits near $52,000, a zone that has held since February, while resistance stands at $65,000, according to Coinglass data.

This article is for informational purposes only and does not constitute investment advice.