Is Bitcoin A Bubble Or Not? 34 Wall Street CEOs & Bankers Explain

11/29/2017 - 15:47 UTC
Is Bitcoin A Bubble Or Not? 34 Wall Street CEOs & Bankers Explain

Bitcoin is on a seemingly non-stop rally to the moon – that’s how cryptocurrency fans explain the almost 12-fold price surge we witness in 2017. But what Wall Street CEOs, established investors and Economists believe?

As we see Bitcoin breaking all-time highs one after another, amidst sudden flash crashes of more than $1000 in a matter of minutes, the question posed by many is whether this is an epic bubble or a new economic paradigm.

Only time will tell for sure, but it might help you if you read what experts believe on this subject. So, here’s a Bloomberg compilation of comments by 34 prominent figureheads explaining what they think about Bitcoin and, especially, whether this is a bubble or not.

Joseph Stiglitz, Professor of Economics, Nobel Prize winner

Bitcoin ought to be outlawed as it “doesn’t serve any socially useful function.” - 11/29/17


Severin Cabannes, Deputy CEO, Societe Generale SA

“Bitcoin today is, in my view, very clearly in a bubble.”  11/03/17


Tidjane Thiam, CEO, Credit Suisse Group AG

“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.” – 11/02/17


Lloyd Blankfein, CEO, Goldman Sachs Group Inc.

“I don’t have an investment in it, but I'm not willing to pooh-pooh it, and that’s why I say I'm open to it.”  – 11/02/17


Bill Miller, Founder, Miller Value Partners

“I believe there is still a nontrivial chance bitcoin goes to zero, but each day it does not, that chance declines as more venture capital flows into the bitcoin ecosystem and more people become familiar with bitcoin and buy it.” – 10/30/17


Warren Buffett, CEO, Berkshire Hathaway Inc.,  billionaire investor

“People get excited from big price movements, and Wall Street accommodates … You can’t value bitcoin because it’s not a value-producing asset.” It's a “real bubble.” – 10/29/17


Brian Moynihan, CEO, Bank of America Corp.

“There ought to be a hard look at the policy of anonymous currencies, because the ability to track information of money flowing is one we use seriously against terrorism and as [a tool] against improper, illegal behavior.” – 10/26/17


Peter Thiel, Co-founder, PayPal, billionaire venture capitalist

Bitcoin critics are “underestimating [it] … It's like a reserve form of money, it's like gold and it's just a store of value. You don't need to use it to make payments.”  – 10/26/17


Prince Alwaleed Bin Talal, Saudi Arabia billionaire, (arrested in early November)

“I just don’t believe in this bitcoin thing. I think it’s just going to implode one day. I think this is Enron in the making ... It just doesn’t make sense. This thing is not regulated, it’s not under control, it’s not under the supervision” of any central bank.  – 10/23/17


Ben Bernanke, Former Chairman, Federal Reserve

“Bitcoin is an attempt to replace fiat currency and evade regulation and government intervention. I don’t think that’s going to be a success.”  – 10/17/17


Sergio Ermotti, CEO, UBS Group AG

“People are more curious than really willing to invest. I don’t think there’s any meaningful desire by high net worth individuals to take big bets on this kind of phenomenon.” – 10/10/17


Kyle Bass, Founder, Hayman Capital Management

“A whole bunch of people are going to lose a lot of money … These ICOs -- you’re going to see a bunch of them go completely broke. A bunch of them are frauds, and that is going to be problematic for all the people that just rushed in.” – 10/06/17


Mark Cuban, Billionaire venture capitalist

Bitcoin's “value is a function of supply and demand; it doesn't really do anything else … Blockchain is a great platform for future applications.”  – 10/03/17


Larry Fink, CEO, BlackRock Financial Management

“Bitcoin just shows you how much demand for money laundering there is in the world.” – 10/03/17


Christine Lagarde, Managing Director, International Monetary Fund

“Not so long ago, some experts argued that personal computers would never be adopted and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.” Countries with “weak institutions and unstable national currencies” may see growing use. – 09/29/17


Ray Dalio, Co-chairman & founder, Bridgewater Associates

“It's very much speculative. People are thinking, ‘Can I sell it at a higher price?‘ so it's a bubble ... With bitcoin, you can’t make much transactions in it and you can’t spend it very easily. It's not an effective store-hold of wealth because it has volatility, unlike gold.” – 09/29/17


James Gorman, CEO, Morgan Stanley

Bitcoin is “certainly something more than just a fad ... The concept of anonymous currency is a very interesting concept -- interesting for the privacy protections it gives people, interesting because what it says to the central-banking system about controlling that.” – 09/27/17


Mike Novogratz, Former macro manager, Fortress Investment Group

“This is going to be the largest bubble of our lifetimes … Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”  – 09/26/17


Vitor Constancio, VP, European Central Bank

“Bitcoin is a sort of tulip. It’s indeed an instrument of speculation for those that want to bet on something that can go up and down 50 or 40 percent in a few days but certainly not a currency, and certainly we don’t see it as a threat to central banking or monetary policy, that’s for sure.” – 09/22/17


Elvira Nabiullina, Governor, Bank of Russia

“China doesn’t recognize cryptocurrency as payment and forbids ICOs … Our views are absolutely similar. In our view, it's a sort of a financial pyramid that may collapse at any moment.” – 09/14/17


Jamie Dimon, CEO, JPMorgan Chase & Co.

“It’s a fraud.” If a JPMorgan trader began trading in bitcoin “I'd fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.” – 09/12/17


Howard Marks, Co-chairman & co-founder, Oaktree Capital Group

“So my initial bottom line is that I see no reason why bitcoin can’t be a currency … But I still don’t feel like putting my money into it, because I consider it a speculative bubble. I'm willing to be proved wrong.” – 09/08/17


Robert Shiller, Nobel winner professor of economics

“The best example [of a speculative bubble] right now is bitcoin.” – 09/05/17


Howard Marks, Co-chairman and co-founder, Oaktree Capital Group

“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." They are "not real!!!!! Nobody has been able to make sense to me of these currencies.” – 07/26/17


Abigail Johnson, CEO, Fidelity Investments

“I'm a believer. ... I'm one of the few standing before you today from a large financial-services company that has not given up on digital currencies.” – 05/23/17 


Haruhiko Kuroda, Governor, Bank of Japan

“Given that the development of financial services has been supported by ledgers as the basic infrastructure for information, the dramatic changes in how ledgers are kept may have the potential of significantly changing the structure of financial services.” – 08/23/16


Mark Carney, Governor, Bank of England

“If distributed-ledger technology could provide a more efficient way for private-sector firms to deliver payments and settle securities, why not apply it to the core of the payments system itself? The great promise of distributed ledgers for central banks is their potential to enhance resilience.” – 06/16/16


Ravi Menon, Managing director, Monetary Authority of Singapore

“Whether digital currencies will take off in a big way remains to be seen. But it is a phenomenon that many central banks are watching closely, including MAS. And if they do take off, one cannot rule out central banks themselves issuing digital currencies some day!'” – 06/29/15


Bill Gates. Founder, Microsoft Corp.

“Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.” – 10/02/14


Richard Branson, Founder, Virgin Group

Bitcoin as a currency “is working. There may be other currencies like it that may be even better. But in the meantime, there’s a big industry around bitcoin. People have made fortunes off bitcoin; some have lost money. It is volatile, but people make money off of volatility, too.” – 09/10/14


Eric Schmidt, Chairman, Alphabet Inc.

Bitcoin “is a remarkable cryptographic achievement. The ability to create something which is not duplicable in the digital world has enormous value.”  – 03/03/14


Paul Krugman, Nobel winnet professor of economics

“Bitcoin is evil … So far almost all of the bitcoin discussion has been positive economics — can this actually work? And I have to say that I’m still deeply unconvinced.” – 12/28/13


Milton Friedman, Nobel prize-winning economist

“The internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash: a method whereby on the internet you can transfer funds from A to B without A knowing B or B knowing A -- the way in which I can take a $20 bill and hand it over to you, and there's no record of where it came from.”  – 06/21/99

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice on Bitcoin, Cryptocurrencies or finance in general.