• Gold and crypto both lack intrinsic value, Oaktree founder Howard Marks said on a Bloomberg podcast.
  • They provide no cash flow, and their price appreciation is driven by limited supply.
  • “Gold is a little more tried and true, but it also lacks any kind of analytical raison d’etre.”

Investors may have their reasons for choosing between bitcoin and gold, but both assets ultimately lack intrinsic value, billionaire investor Howard Marks said.

Speaking on Bloomberg’s “Merryn Talks Money” podcast on Thursday, the Oaktree Capital founder discussed a range of topics, including stocks, bonds, monetary policy, and private equity. Then he host last pressed him to opine on crypto and gold.

"You can invest in crypto because it's fun," Marks said, later adding, "You can invest in gold, kind of out of superstition, and people have been doing that for centuries."

Otherwise, neither can provide investors with cash flow, a baseline condition by which Marks defines "intrinsic value." That's compared to assets such as stocks, bonds, companies, land, and buildings, all of which will yield added returns, whether through interest, dividends, or earnings.

Instead, both the yellow metal and crypto are only worth what others are willing to pay for it, Marks said, putting them in a category with assets such as art, furs, and even oil.

"Gold is a little more tried and true, but it also lacks any kind of analytical raison d'etre," he said, when asked which he would prefer if he had to choose between gold or bitcoin.

In terms of price appreciation, he noted that gold and bitcoin aren't that different from one another either, as both their values are driven by a limited supply. The metal is a finite commodity, and there will be no more than 21 million bitcoins ever produced.

In a 2010 memo, Marks previously highlighted other investment qualities behind gold, such as its store of value in uncertain times and ability to hedge against inflation — though back then he also emphasized it has no other intrinsic value.

In fact, while gold continues to reign as the leading safety asset, bitcoin topped the dollar to become the third-most preferred investment hedge, according to Bloomberg survey from May. 

Still, other Wall Street players see more value in bullion over the digital asset. In April, billionaire investor Ray Dalio acknowledged holding some bitcoin, but cited that its volatility requires excessive attention from investors.

"I don't understand why people are more inclined to go to bitcoin than gold. If you look internationally, gold is, for central banks, the third highest reserve asset," the Bridgewater Associates founder said at the time.