Howard Marks, one of the most respected value investors out there, starkly warned his clients to avoid high-flying digital currencies.

"In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it," Marks wrote in the investor letter Wednesday.



Ethereum cryptocurrency is up more than 2,300 percent year to date through Wednesday, while bitcoin is up nearly 160 percent this year, according to data from industry website CoinDesk.