Blockchain and Crypto

The year bitcoin was suddenly everywhere

  • 2017 will go down as the year that bitcoin and cryptocurrency moved into the mainstream -- not in the sense that everyone owns and spends bitcoin, but in the global awareness and curiosity around it
  • There's an obvious understanding gap when it comes to bitcoin and many are still learning what bitcoin is and how to treat it
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The year bitcoin was suddenly everywhere

2017 will go down as the year that bitcoin and cryptocurrency moved into the mainstream. CME Group, the biggest exchange operator by value, now allows traders to bet on the future value of bitcoin. DJ Khaled and Paris Hilton promoted ICOs. There was a “Big Bang Theory” episode that tackled cryptocurrency. People are talking about it at Thanksgiving dinner.

It’s not the most sophisticated conversation, though. Bitcoin may not be mainstream in the sense that everyone owns, spends or even gets paid in bitcoin, but there is a global awareness and curiosity around the cypto frenzy. There’s also an obvious understanding gap. Whether you’re a banker, regulator, institutional investor or prospective crypto trader, the mainstream is still figuring out what bitcoin is and how to treat it.

Here’s everything bankers and investors said about bitcoin in 2017:

Abby Johnson, CEO, Fidelity Investments: “We still think this scenario has a reasonable chance of coming to pass — despite what the skeptics say… If you’re looking for bitcoin to beat Visa at the point of sale today you’ll be disappointed. If you’re looking at this technology as just a faster settlement system for financial transactions you’ll also be disappointed. But I’m still a believer.

Jamie Dimon, CEO, JPMorgan Chase: “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.”

Josh Brown, CEO, Ritholtz Wealth Management: “One of the things I’ve learned in the investing world is that very often the thing that’s supposed to break an asset class is the thing that truly strengthens it… A lot of the stuff I felt about [bitcoin] — that it’s going to be a Wild West and it’s unregulated and there are hacks and it’s dangerous – all of that was right. I was completely right about it. But what I didn’t see happening was that it wasn’t going to die.

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.”

Christine Lagarde, 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.

Mark Cuban, businessman and investor: “[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.”

Prince Alwaleed Bin Talal, Saudi Arabian investor: “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 a central bank].”

Peter Thiel, partner, Founders Fund: “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.”

Brian Moynihan, CEO, Bank of America: “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.”

Warren Buffet, CEO, Berkshire Hathaway: “People get excited from big price movements, and Wall Street accommodates … You can’t value bitcoin because it’s not a value-producing asset.”

Lloyd Blankfein, CEO, Goldman Sachs: “I read a lot of history, and I know that once upon a time, a coin was worth $5 if it had $5 worth of gold in it. Now we have paper that is just backed by fiat… Maybe in the new world, something gets backed by consensus… 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.”

Joseph Stiglitz, Nobel laureate: “Bitcoin is successful only because of its potential for circumvention, lack of oversight, so it seems to me it ought to be outlawed. It doesn’t serve any socially useful function… It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down. The value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow.”

Lorenzo Bini Smaghi, chairman, Société Generale: “We will discover that behind this bitcoin scam, some funds were channeled maybe to finance terrorism and at that point, we will wake up and realize that this is not appropriate.”

Jack Bogle, founder, Vanguard Group: Avoid bitcoin like the plague. Did I make myself clear? … There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it… Bitcoin may well go to $20,000 but that won’t prove I’m wrong. When it gets back to $100, we’ll talk.”

Alan Greenspan, former Federal Reserve chairman: “Before it was worthless, George Washington was able to buy a lot of armaments, [and pay] basically all sorts of troop costs… Human beings buy all sorts of things that aren’t worth anything, but they do it anyway. You cannot tell me that you can create, out of nothing, something which has a medium of exchange value without bringing into the analysis the fact that sometimes people are a little bewildered.”

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