Many representatives of the traditional finance industry are continuing to criticize bitcoin. In recent days, CNBC has spoken with among others David Gledhill of DBS, Interactive Brokers’ Thomas Peterffy, and Morgan Stanley’s James Gorman – all of whom has made discouraging statements regarding bitcoin.
Also Read: Real Estate Listings Use Bitcoin to Garner Publicity
Representatives of Major Financial Corporations Are Continuing to Criticize Bitcoin
David Gledhill, the group chief information officer at DBS, has called bitcoin a “Ponzi scheme.” Also known as The Development Bank of Singapore Limited, DBS is multinational banking institutions headquartered in Singapore that services numerous countries in the Asian region. Mr. Gledhill criticized the fees associated with bitcoin transactions, describing such as “incredibly expensive.”
Mr. Gledhill told media “we don’t think DBS being in [bitcoin] right now is going to create a competitive advantage for us.” Rather, the DBS representative stated that “right now, it’s watch and learn.”
The Chairman and Chief Executive Officer of Morgan Stanley, James Gorman, has described bitcoin as “punching above its weight.” Mr. Gorman expressed his opinion that bitcoin “doesn’t quite deserve the attention it is getting,” however conceded that “as acceptance is growing with bitcoin, and usability is growing, clearly it’s not going away.”
“Is [Bitcoin] a Needed New Form of Stored Value? I’m Not So Sure.” – James Gorman, CEO of Morgan Stanley
Mr. Gorman criticized the highly speculative nature of bitcoin, stating “something that goes up 700 percent in a year – it’s by definition speculative. So anybody who thinks they’re buying something that it’s a stable investment is deluding themselves. It might go up another 700 percent, but it could easily not.”
Mr. Gorman also emphasized his concerns relating to the use of bitcoin by “people who want to use currencies on [an] anonymous basis for wrong purposes,” adding “will the regulators and the central banks just watch this from a distance? I’m not so sure.”
Thomas Peterffy, the chairman of Interactive Brokers, has stated that although he personally does not oppose individuals trading bitcoin, he believes cryptocurrencies should be separated from the “real economy.” Mr. Peterffy stated “I think bitcoin and other cryptocurrencies are great ideas. They should be allowed to be traded freely and used freely to find their appropriate role in the economy… What I am objecting to is linking bitcoin and other cryptocurrencies by federal regulations to the real economy, which would happen if we were to clear bitcoin along with other products in the same trading house.”
Mr. Peterffy Recently Took out a Full-Page Ad in the Wall Street Journal to Warn Against Cryptocurrency
Mr. Peterffy is concerned that embedding cryptocurrency into said “real” economy could expose traditional markets to the volatility of bitcoin. Mr. Peterffy stated “bitcoin has risen by 1,000 percent over the last year. It went from $700 to $7,000 – there is nothing to say it wouldn’t go to $70,000… It could bring down the entire economy.”
On the 14th of November, Mr. Peterffy took out a full-page ad in The Wall Street Journal to publish an open letter warning the Commodity Futures Trading Commission (CFTC) chairman Christopher Giancarlo as to the “dangers of clearing bitcoin and cryptocurrency derivatives in [the] same organization as other products” in reference to CME’s upcoming launch of bitcoin futures trading.
What do you think of the criticisms made regarding bitcoin? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, DBS, Wikipedia, Interactive Brokers
Need to calculate your bitcoin holdings? Check our tools section.