‘Commodities King’ Dennis Gartman has been left with a red face and diminished pension fund after investing in a dubious blockchain company. Shares in Riot Blockchain Inc plunged by 30% following a CNBC investigation, leaving Gartman’s fund in a negative balance for the year to date. The trader has previously described bitcoin as being “nothing more than a scam of the first order.”
Gartman Gets Rekt by the Blockchain Meme
There was more than a touch of schadenfreude in the crypto community when news of Dennis Gartman’s poor investment emerged this week. Every trader is bound to get things wrong on occasions, but in going long on Riot Blockchain Inc, Gartman appears to have gone against his own advice. By his own admission, the author of the eponymous The Gartman Letter doesn’t fully understand bitcoin. His decision to invest heavily in a company purporting to make use of bitcoin’s underlying ledger technology is thus a strange one.
Dennis Gartman has been involved in the markets since the 1970s, and by all accounts has done well for himself. In 1987 he began producing The Gartman Letter, which goes out to leading banks, brokerages, mutual funds, and hedge funds on a full-time basis. On Tuesday he was forced to deliver bad news to the letter’s subscribers:
Friday was one of the worst days we have suffered through in a very long while. We were long of a sizeable position in a blockchain focused company that was the victim of a CNBC expose, which sent the shares down more than 20 percent and which sent us ‘down’ for the year to date, having been up about 6 percent previously.
In October the company, then trading as Bioptix, changed its name to Riot Blockchain. By December 19 its share price had shot up to $38.60 from around $5 in October. It couldn’t sustain that momentum however and has been dropping ever since. A CNBC investigation into the firm last week shaved 33% off its stock in a single day, which is now trading for under $11. The CNBC article quotes SEC chairman Jay Clayton as saying: “Nobody should think it is OK to change your name to something that involves blockchain when you have no real underlying blockchain business plan and try to sell securities based on the hype around blockchain.”
Believe the Blockchain But Don’t Believe the Blockchain Hype
As Bioptix, the company had been known for filing veterinary patents, which makes its reinvention as blockchain innovator all the harder to fathom. One might have suspected an investor of Mr Gartman’s stature to have exercised more caution and diligence. “Lessons have to be learned again and again and again it seems,” finished Gartman glumly, “Or at least we apparently have to learn them over and over and over again.” Two months ago, the same Commodities King was telling CNBC that bitcoin was nonsense. As he is now learning, bitcoin is perfectly sensible. Investing in companies that have requisitioned the blockchain mantle, however, is anything but.
Do you think Mr Gartman will be dissuaded from investing in blockchain companies from now on? Let us know in the comments section below.
Images courtesy of Shutterstock, and CNBC.
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