Bitcoin and cryptocurrency trading is not for the faint of heart, as Dave Portnoy, the founder of the Barstool Sports blog-turned stock market day trader, learned this year.
Now, Portnoy has revealed he’s completely cashed out his $1 million bet on bitcoin and warned he thinks the cryptocurrency market is nothing more than a Ponzi scheme.
“It’s just one big Ponzi scheme,” Portnoy told bitcoin and cryptocurrency investor Anthony Pompliano on the popular Pomp Podcast this week. “You get in, and you just have to not be the one left holding the bag. It’s no different from the stock market. Everyone’s pumping their own [coin], alright.”
Portnoy’s declaration was met with derision by many in the bitcoin and cryptocurrency community.
“Oh dear Dave,” Jameson Lopp, the cofounder and chief technology officer at a Colorado-based provider of bitcoin security services Casa, said via Twitter. “By that definition every publicly traded asset is a Ponzi.”
Others were more understanding of Portnoy’s position.
“Structurally people call things Ponzis when it looks like a bubble and with no real productivity shown,” said bitcoin and cryptocurrency analyst Willy Woo. “Early stage startups with ever increasing valuations fall into this camp. The thing is, it looks like a Ponzi until it takes over as the new normal and changes the world.”
Portnoy has found huge success riding the post-coronavirus crash stock market rally this year, buying discount shares that have soared amid unprecedented market intervention by the U.S. Federal Reserve—and leading an army of day traders with the maxim: Stocks only go up.
Portnoy jumped into the helter skelter world of bitcoin and cryptocurrencies over the summer, bowing to calls from his fans that he should branch out from stocks and shares. The whirlwind dalliance saw Portnoy buy some $1.25 million worth of bitcoin as well as the breakout Chainlink cryptocurrency before a downturn caused him to sell his holdings.
Following a Twitter declaration that he wanted to “buy all the bitcoins” in August, Portnoy invited cryptocurrency exchange founders Cameron and Tyler Winklevoss to explain bitcoin to him—which they did later that month with mixed success.
“I literally have no idea what bitcoin is,” Portnoy said after the Winklevoss twins’ interview.
Despite selling his bitcoin and other cryptocurrency holdings, Portnoy did admit to Pompliano he misses the memes, adding that the bitcoin and cryptocurrency community is “kind of like my people.”
“I’ll get back,” Portnoy said. “I’ve been saying that I’ll be back into bitcoin. I don’t know when, but I’ll be back.”