| Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday. |
Photograph: Chesnot/Getty Images
November 30, 2017
By Angela Monaghan - November 30, 2017 (www.theguardian.com)
CEO Lloyd Blankfein attacks cryptocurrency after value dives 20% in a day, saying bank will not get involved until it becomes less volatile.
Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday. Photograph: Chesnot/Getty Images
The boss of Goldman Sachs became the latest high-profile critic of bitcoin, claiming it was a vehicle to commit fraud as the value of the cryptocurrency plunged 20% in less than 24 hours.
Lloyd Blankfein, chief executive of the US investment bank, said: “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”
His comments came during another wildly volatile trading session for the digital currency, which plunged by over $2,000 in a 24-hour period. Having topped $11,000 to reach a new record high of $11,395 on Wednesday, it fell to a low of $9,000 on Thursday, before picking up slightly later in the day.
Blankfein said Goldman did not need to have a bitcoin strategy, adding the digital currency would need to be a lot less volatile and a lot more liquid to justify closer attention.
“When do I have to have a bitcoin strategy? Not today. Life must be really rosy if that is what we are talking about,” he said. “Bitcoin is not for me. A lot of things that have not been for me in the past 20 years have worked out, but I am not guessing that this will work out.”
Blankfein is the latest boss of a major bank to voice scepticism about bitcoin, after JP Morgan’s chief executive, Jamie Dimon, described it as fraud that would ultimately blow up and said it was only fit for use by drug dealers, murderers and people living in places such as North Korea.
On Wednesday, Sir Jon Cunliffe, a deputy governor of the Bank of England, said the digital currency was too small to pose a systemic threat to the global economy. He also cautioned that bitcoin investors needed “to do their homework”.
Despite the fall in bitcoin’s value on Thursday, it remained far higher than it was at the start of 2017, when it was trading at $998. It is the biggest gainer of all asset classes this year, prompting sceptics to declare it a classic speculative bubble that could burst.
Banks and other financial institutions remain concerned about bitcoin’s early associations with money laundering and online crime. Unlike traditional currencies, bitcoin is not issued or regulated by a central bank or government.
“Cryptocurrency land’s extreme volatility is like catnip to high-risk traders, and even traditional investors are dipping their toe. Given there’s no logical way to value them with any accuracy, this remains wild west stuff.”
Analysts at the spread betting firm, City Index, said: “While traditional assets are experiencing historically low levels of volatility, the whipsaw action of the bitcoin is drawing the attention of traditional traders. Meanwhile existing traders and newcomers are increasingly interested in fear of missing out.”
November 09, 2017
By Tedra DeSue - November 09, 2017 (cryptovest.com)
Bank CEOs continue to be asked to give their thoughts on cryptocurrencies. For his part, Citi’s chief seems to see them as a reckoning force.
Another day, another Big Bank CEO weighs in on cryptos.
This time it was Citi’s chief Michael Corbat. In an interview with Bloomberg, he voiced optimism about cryptocurrencies and the Blockchain technology that underpins them.
Let’s review some of his comments.
So far, Corbat said he hadn’t seen a significant uptick in the number of clients looking to invest in cryptocurrencies. He said demand for Blockchain technology, or access cryptos as an investible asset, has been fairly limited and concentrated.
“When you want to go to the corner store and get a loaf of bread, try to use it, try the experience and you would find it today, in my word, you’ll find it to be a bit clunky. But again we can’t be dismissive of the underlying technology, and ultimately what it represents in terms of the next things that are coming down the pike.”
Corbat seems to appreciate regulators not moving in yet to shut down the use of cryptocurrencies.
“In some ways there’s the challenge that regulation actually stalls or impedes innovation. As an observer, I would guess, or likely say, [that regulators] are intrigued by innovation, and they’re intrigued by the underlying technology.
I think there is a future to digital currencies. And rather than cut it off at this point, let it run a bit. But I do believe that at the point that it truly does become meaningful and difficult to manage around tax collection, criminal activity, tax evasion, money laundering, etcetera, that governments will have something meaningful to say on that.”
Falling in line
The banking industry has the most to lose as cryptos continue march into wallets of consumers. While they still are widely used for purchases, as noted by Corbat, cryptos are steadily becoming more acceptable by the mainstream.
As they do, bankers are weighing in more. We just told you how Goldman Sach’s CEO Lloyd Blankfein recently said he wasn’t going to “pooh pooh” on Bitcoin.
The only head of a Big Bank left on the crypto-hater bandwagon is JP Morgan’s Jamie Dimon.
November 04, 2017
By Francisco Memoria - November 04, 2017 (www.cryptocoinsnews.com)
At a time in which bitcoin reaches a new record high around the $7,500 mark and catapults the cryptocurrency market cap above the $200 billion mark for the first time in history, Credit Suisse CEO Tidjane Thiam makes it clear that he isn’t a fan of the cryptocurrency, as he stated it was the “very definition of a bubble” while speaking at a news conference in Zurich.
The CEO expressed caution as interest in bitcoin could eventually subside. He noted that right now people are buying the cryptocurrency expecting a price rise that will help them make money, not as a store of value, meaning it is a bubble. He notably stated:
“From what we can identify, the only reason today to buy or sell Bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble.”
Tidjane Thiam added that bitcoin currently presents a number of challenges, and expressed concern over its anonymity, as to him it is particularly problematic for financial institutions that, given the potential money-laundering risks, are likely not to get involved with the cryptocurrency. He added:
“Bitcoin presents a number of challenges. The first of them is really the anonymity. (…) I think most banks in the current state of regulation have little or no appetite to get involved in a currency which has such anti-money laundering challenges".
Analysts believe that more institutional investors are going to enter the cryptocurrency ecosystem, as one of the largest derivatives exchange in the world, CME Group, recently decided to launch bitcoin futures.
Given his words, Thiam now joins a list of bankers and Wall Street executives who believe bitcoin is a bubble. Among them are Berkshire Hathaway CEO and billionaire investor Warren Buffet, who warned there’s a “real bubble” in bitcoin as, according to him, the cryptocurrency cannot be valued because it isn’t a value-producing asset.
Earlier this year, JP Morgan CEO Jamie Dimon also criticized bitcoin by calling it a “a fraud” and stating he would fire anyone in his financial institution trading it. Later on, Dimon stated that the cryptocurrency was “worth nothing” before taking a third shot at the cryptocurrency and its investors, notably stating that anyone “stupid enough to buy [bitcoin] will pay the price.”
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, also stated that bitcoin is a bubble, as it met his firm’s criteria for it., partly because some investors buy coins to later on sell them at a higher price, and because of its volatility.
On the other hand, some aren’t as dismissive of bitcoin. Goldman Sachs CEO Lloyd Blankfein recently told Bloomberg he wasn’t willing to “pooh pooh” the cryptocurrency, despite having a certain “level of discomfort with it” as is the case with anything new. Morgan Stanley CEO James Gorman also recently stated that bitcoin is “more than just a fad” that “isn’t inherently bad.”
Featured image from Flickr/Africa Progress Panel.
Posted by Francisco Memoria
Francisco is a cryptocurrency writer who's in love with technology and focuses on helping people see the value digital currencies have. Twitter: https://twitter.com/FranciscoMemor