Excerpted from Howard Marks latest memo...

Digital Currencies

The discussion of innovative investments brings me to Bitcoin, Ether and other digital currencies.  I'd guess these things have arisen from the intersection of (a) doubts about financial security – including the value of national currencies – that grew out of the financial crisis and (b) the comfort felt by millennials regarding all things virtual.  But they're not real.

Some businesses accept Bitcoin as payment.  Some buyers want to own Ether because it can be used to pay for computing power on the Ethereum network.  Some people are eager to speculate on digital currency for profit.  Others want to put a little money into these to-date-profitable phenomena rather than run the risk of missing out.  But they're not real!

People tell me these currencies are solid, because (a) they're secure against hacking and counterfeiting and (b) the software used to generate them strictly limits the amount that can be created.  But they're not real!!!!!  Nobody has been able to make sense to me of these currencies.  Here are a few paragraphs on Ether from The New York Times of June 19:

The sudden rise of Ethereum highlights how volatile the bewildering world of virtual currency remains, where lines of code can be spun into billions of dollars in a matter of months. . . .