In the past few months, prominent leaders in the finance sector have become notably vocal in their doubt, and sometimes even suspicion regarding Bitcoin. Considering the cryptocurrency’s remarkable growth rate of the past year, several businesses and finance leaders have called cryptocurrency the next investment bubble.
In a recent interview with CNBC, the managing director of the Development Bank of Singapore (DBS), Dave Gledhill, stated that Bitcoin is a mere Ponzi Scheme. DBS is a large banking firm that is based in Singapore and provides complex banking solutions to several users across various Asian countries. In addition to Gledhill’s discouraging remarks, he also targeted Bitcoin transaction fees and claimed that these were too expensive.
According to Gledhill, DBS sees no benefit to them entering the cryptocurrency industry at this stage, and, to use Gledhill’s words, they are now watching and learning, rather than partaking.
In addition to Gledhill’s remarks, James Gorman, the CEO and Chairman of Morgan Stanley, stated that Bitcoin is too successful for its own good. Gorman added that Bitcoin’s media attention is largely undeserved. However, he did acknowledge that the underlying technology could be useful and is here to stay.
Gorman continued to be critical of Bitcoin’s inherent speculative and volatile nature. According to Gorman, any stock or currency which grows 700% within a year is the very definition of speculative. He added that Bitcoin is a volatile investment, as the cryptocurrency could just as quickly decrease or stagnate.
To conclude, Gorman expressed his concern for the nefarious activities that Bitcoin’s increased anonymity encourages. He added that hopefully financial regulators and local financial institutions would become more adepts at tracing transactions in the future.
The Chairman of Interactive Brokers, Thomas Petereffy, seemed more optimistic regarding Bitcoin and other cryptocurrencies. According to Petereffy, while he supports the idea behind Bitcoin, he is concerned about the potential that could arise once Bitcoin becomes linked to fiat currency and other more tangible assets, which Petereffy referred to as the “real economy.”
Petereffy stated that while he believes that cryptocurrency should be freely traded in order to establish their role in the economy, Petereffy issued caution concerning the issue of linking Bitcoin to the real-life economy.
According to Petereffy, there is a danger that once cryptocurrency becomes tied to the real economy, the real economy could become subject to cryptocurrency’s vulnerability. If Bitcoin continues to rise at its current unprecedented speed, it could severely damage other economic sectors.
Earlier this week, Petereffy purchased an entire full-page advertisement in the popular finance publication, The Wall Street Journal. Using the ad space, Petereffy directs an open letter to the chairman of the Commodity Futures Trading Commission (CFTC) Christopher Giancarlo, wherein which he expresses the possible dangers that could come from clearing cryptocurrencies and traditional stock in the same exchange house. This was clearly in reference to CME Group’s latest announcement that they will implement Bitcoin Futures before the close of the year.