Billionaire Investor Jeremy Grantham Says Crypto Is “Useless.” Has the Market Already Proven Him Wrong?

Jeremy Grantham has built a reputation as one of Wall Street’s most respected bubble spotters. The veteran investor correctly warned about Japan’s asset bubble in the late 1980s, the dot-com collapse, and the U.S. housing market before the 2008 financial crisis. When Grantham labels an asset class a speculative bubble, investors tend to pay attention.

His latest target is cryptocurrency.

Speaking in a recent interview, Grantham dismissed crypto as a “useless speculative” asset and predicted that it will eventually disappear “not with a bang, but a whimper.” He argued that cryptocurrencies fail as stable stores of value, see little genuine use in everyday commerce, and derive much of their appeal from speculation rather than practical utility. His sharpest criticism came when discussing illicit finance, claiming that crypto’s main function is allowing criminals to move money without leaving a trace.

Coming from an investor with Grantham’s track record, those comments deserve attention. But they also arrive at a time when the cryptocurrency market looks very different from the one that existed just a few years ago.

Grantham’s Longstanding Skepticism

Grantham’s criticism of crypto is consistent with his broader investment philosophy. Throughout his career, he has focused on assets with measurable intrinsic value, whether through cash flows, productive businesses, farmland, timber, or real estate. In his view, long-term investment returns eventually converge with underlying economic value.

Cryptocurrencies have always challenged that framework. Bitcoin does not generate earnings. Ethereum’s valuation is difficult to compare with traditional financial assets. Many digital tokens depend largely on market demand rather than discounted future cash flows.

From that perspective, Grantham sees crypto as an asset driven primarily by investor psychology. Prices rise because buyers expect future buyers to pay more, creating a cycle that resembles previous speculative episodes he has spent decades studying.

His criticism also reflects crypto’s extraordinary volatility. Assets that can gain or lose 50% within months struggle to function as stable stores of value, particularly for households or businesses seeking predictable purchasing power.

Those concerns are not unique to Grantham. Many traditional investors have questioned whether cryptocurrencies can ever fulfill the monetary role that early supporters envisioned.

The Payments Argument

Grantham also argues that cryptocurrencies have failed to become meaningful payment systems.

In some respects, the data supports his position. Despite years of development, relatively few consumers purchase groceries, pay rent, or receive salaries directly in Bitcoin or most other cryptocurrencies. Traditional payment systems still dominate global commerce, while credit cards, bank transfers, and digital wallets process vastly more everyday transactions.

Bitcoin itself has gradually evolved away from its original vision as peer-to-peer electronic cash. Today it is more commonly viewed as a long-term investment asset or digital reserve rather than an everyday payment network.

However, the broader crypto ecosystem has evolved considerably.

Stablecoins have emerged as one of blockchain’s fastest-growing sectors, processing trillions of dollars in annual transaction volume. They have become increasingly important for international settlements, remittances, institutional trading, treasury management, and cross-border payments. Unlike highly volatile cryptocurrencies, stablecoins maintain relatively stable values while retaining blockchain’s programmability.

That distinction complicates the argument that blockchain technology lacks practical payment use cases. While Bitcoin may not have become everyday money, digital dollars operating on blockchain networks are increasingly being used for real financial activity.

Is Crypto Really “Useless”?

The usefulness of cryptocurrency depends largely on which part of the industry is being evaluated.

If the discussion focuses on thousands of speculative tokens created primarily for trading, Grantham’s criticism resonates with many observers. A significant portion of the crypto market has produced little lasting value beyond speculation.

But blockchain technology has expanded into several areas that extend beyond price speculation alone.

Decentralized finance allows users to borrow, lend, trade, and provide liquidity without traditional financial intermediaries. Tokenization projects are bringing stocks, bonds, real estate, and other assets onto blockchain networks. Stablecoins have become an increasingly important component of international finance. Major financial institutions are experimenting with blockchain settlement systems, while governments continue exploring central bank digital currencies.

None of these developments guarantee long-term success, but they suggest that the ecosystem has evolved beyond the narrow use cases that existed during previous crypto cycles.

The challenge is separating genuine infrastructure from speculative excess.

The Crime Question

Grantham’s most controversial claim is that crypto primarily exists to help criminals move money without leaving a trace.

That criticism has been part of the crypto debate since Bitcoin’s earliest years. Darknet marketplaces, ransomware attacks, sanctions evasion, and certain forms of money laundering have all involved cryptocurrency.

However, blockchain transactions are generally far from invisible.

Public blockchains record transactions permanently, allowing blockchain analytics firms and law enforcement agencies to trace fund movements with increasing sophistication. Numerous criminal investigations have relied on blockchain analysis to recover stolen assets, identify suspects, and dismantle illicit financial networks.

Privacy-focused cryptocurrencies offer stronger anonymity features than Bitcoin, but they represent only a small portion of the overall crypto market.

Ironically, many investigators now argue that blockchain’s transparent ledger can make financial crimes easier to trace than cash-based transactions under certain circumstances.

That does not mean cryptocurrencies are free from criminal misuse. Like cash, bank accounts, and payment platforms, they can be abused. The debate centers on whether criminal activity defines the technology or represents one of many possible uses.

The Institutional Shift

One reason Grantham’s comments have generated attention is the dramatic change in institutional participation.

Just a few years ago, many large asset managers refused to engage with cryptocurrencies altogether. Today, regulated Bitcoin exchange-traded funds have attracted billions of dollars from institutional investors. Major banks are expanding digital asset services, while publicly traded companies increasingly hold Bitcoin on their balance sheets.

Institutional adoption does not prove that crypto is fundamentally valuable. Financial history contains many examples of institutions participating in overvalued markets.

However, it does suggest that cryptocurrencies have become more integrated into mainstream financial markets than many early critics anticipated.

Instead of remaining a niche experiment, digital assets have gradually become another investable asset class for many professional investors.

Bubble or New Asset Class?

Grantham’s reputation naturally raises another question: could he be right again?

History shows that technological innovation and speculative bubbles often occur simultaneously. Railroads, electricity, automobiles, and the internet all experienced periods of excessive speculation before becoming transformative industries.

The collapse of countless dot-com companies did not invalidate the internet itself.

Likewise, thousands of cryptocurrencies have disappeared over the past decade. Many projects failed, investors lost money, and speculative manias repeatedly inflated unsustainable valuations.

Yet blockchain development continued.

Bitcoin survived multiple bear markets. Ethereum became the foundation for decentralized applications. Stablecoins evolved into major payment infrastructure. Tokenization, decentralized finance, and institutional blockchain initiatives continued expanding despite repeated market downturns.

The important question may no longer be whether speculation exists. It clearly does. The more relevant question is whether speculation overshadows genuine technological progress.

A Different Investment Philosophy

Part of the disagreement ultimately comes down to investment philosophy.

Grantham evaluates assets primarily through the lens of intrinsic value and long-term cash generation. Crypto supporters often argue that blockchain networks should instead be viewed as digital infrastructure, decentralized computing platforms, or monetary networks rather than traditional productive assets.

These frameworks naturally produce different conclusions.

If Bitcoin is viewed strictly as a non-productive asset, it becomes difficult to justify using conventional valuation methods.

If it is viewed as digital monetary infrastructure competing with gold or global settlement systems, supporters argue that different valuation approaches become appropriate.

Neither framework has achieved universal acceptance.

That uncertainty explains why cryptocurrencies continue to divide experienced investors more sharply than almost any other modern asset class.

The Debate Is Far From Over

Jeremy Grantham has earned credibility by identifying speculative excess long before markets recognized it. His warnings therefore carry weight, particularly during periods of investor enthusiasm.

At the same time, the cryptocurrency industry he criticizes has changed substantially since Bitcoin’s early years. Stablecoins process enormous transaction volumes, institutions have embraced regulated digital asset products, blockchain infrastructure continues expanding, and new applications—particularly around tokenization and artificial intelligence—are emerging at a rapid pace.

Whether those developments ultimately justify today’s valuations remains an open question.

Grantham believes crypto’s story will end quietly, fading as investors eventually abandon assets that lack lasting economic value.

Crypto supporters believe the opposite. They argue that blockchain technology is gradually becoming financial infrastructure, and that today’s volatility resembles the early stages of previous technological revolutions rather than their end.

The market has not yet delivered a final verdict.

For now, Grantham’s criticism serves as a reminder that even as digital assets become increasingly mainstream, the fundamental debate surrounding their long-term value remains as intense as ever.