‘Fraud’ or the Future? How Bitcoin is Being Described by Billionaires and Wall Street CEOs

By JESSICA MARMOR SHAW

Cryptocurrencies have become the hottest of hot topics — it seems not a day goes by without some Wall Street VIP or financial luminary proclaiming their stance.

Is bitcoin BTCUSD, +0.07%   a “fraud” or the future? Are ICOs just a scam? Depends whom you ask. One thing’s for sure, there’s no shortage of opinions.

Here’s what some of the financial-world heavyweights have had to say lately.

Goldman Sachs GS, +2.39%  CEO Lloyd Blankfein:

‘Still thinking…’

In a tweet on Oct. 3, Blankfein appeared to signal that the jury is still out on bitcoin, but also cautioned skeptics to consider that the rise of paper money over gold might also have fostered similar doubts from market stalwarts.

Here’s the substance of his tweet: “Still thinking about #Bitcoin. No conclusion-not endorsing/rejecting. know that folks also were skeptical when paper money displaced gold.”

Meanwhile, Goldman is reportedly exploring a new trading platform that would be centered on trading in bitcoin and its rivals, like ether.

J.P. Morgan Chase & Co. JPM, +1.35%  CEO Jamie Dimon:

‘It’s a fraud.’

Dimon said in early September that “bitcoin is not a real thing and it’s solely speculative and that there’s no need for it in the U.S.”

He has also compared the rapid ascent of bitcoin with the 17th-century mania over tulip bulbs — viewed as a classic, textbook bubble — and predicted that things may end just as badly for investors in the decentralized currency, which has been surging over the past year.

“Bitcoin will eventually blow up. It’s a fraud. It’s worse than tulip bulbs and won’t end well,” he said.

Dimon also said he would fire any trader trading bitcoin for being “stupid.”

Morgan Stanley MS, +1.27%  CEO James Gorman:

‘More than just a fad’

Gorman came out on the record in late September to argue that the cryptocurrency phenomenon at least is “more than just a fad.”

“I haven’t invested in it. I’ve talked to a lot of people who have. It’s obviously highly speculative but it’s not something that’s inherently bad. It’s a natural consequence of the whole blockchain technology.”

Gorman has said some of the potential attractions of a digital currency are “the privacy protections it gives people,” adding that it is “interesting because what it says to the central banking system about controlling that.”

Warren Buffett, CEO of Berkshire Hathaway BRK.A, +0.61%  :

‘It’s a mirage…’

Way back in 2014 (a century ago in cryptocurrency time), the Oracle of Omaha said this about bitcoin on CNBC:

“Stay away from it. It’s a mirage, basically. It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?”

BlackRock CEO Larry Fink:

‘I am a big believer in the potential…’

The rapid ascent of cryptocurrencies “identifies how much money laundering there is being done in the world,” Fink said during a Bloomberg interview with the Wall Street luminary at the BlackRock Fixed Income ETF conference in New York on Oct. 3.

However, he also said: “I am a big believer in the potential in what cryptocurrencies can do.” He said he saw “huge opportunities,” but that presently the atmosphere around bitcoin was “more speculative.”

Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund:

‘Bitcoin is a bubble.’

Dalio said in September that cryptocurrencies like bitcoin meet his firm’s criteria for a market bubble, in part because they don’t serve as a reliable storehold of value due to their extreme volatility and signs that people buy them with the sole of intent of selling them later on at a higher price.

“Bitcoin is a highly speculative market,” he told CNBC. “Bitcoin is a bubble.”

Fidelity Investments CEO Abigail Johnson:

‘We need to address the barriers…’

Johnson has come out as a proponent of cryptocurrencies, and has made cryptocurrency balances visible on the investment manager’s website for customers who hold an account with Coinbase — a popular crypto exchange.

“I like to think that huge new markets and products will be built on these platforms,” Johnson said at Consensus, a blockchain-centric conference put on by digital currency site CoinDesk. “But before that can happen, we need to address the barriers there are to adoption — and there are several.”

We laid out the four primary roadblocks she identified here.

 

by