Every bitcoin milestone brings more stone throwers. As bitcoin’s price returns above the $11,000 mark, Ken Griffin, the billionaire founder and CEO of the Citadel hedge fund management firm, has joined the chorus of bitcoin naysayers, comparing bitcoin’s price surge to the tulip bulb bubble centuries ago in Holland, in an interview with CNBC.
Griffin offers a somewhat different take on the cause of bitcoin’s popularity: people are confusing it with blockchain technology, which in Griffin’s view, has merit.
Griffin, cognizant of the financial industry’s investment in blockchain technology, said blockchain technology will have profound social implications for years to come. He said the technology creates fast, secure and permanent transaction records and removes the need for third parties like banks.
Financial institutions and big corporations are experimenting with blockchain technology to improve global payments and supply chain management.
But as for bitcoin, Griffin said people are confusing it with blockchain technology. He said he worries that people who buy bitcoin don’t realize what they are doing. He said people only know that bitcoin’s value is rising and they don’t want to miss out on an opportunity to profit.
Griffin said he does not consider bitcoin to be a fraud, as some naysayers have said, but he maintained that it is a bubble that will eventually hurt people. He said he worries how the bubble might end.
Griffin has a net worth of $8.6 billion, according to Forbes, while Citadel holds more than $27 billion in assets.
Griffin joins a growing list of financial leaders who have called bitcoin a bubble.
Jim Cramer, former hedge fund manager, best-selling author, and host of Mad Money, said just a few days ago that bitcoin is a prime example of a what a bubble is. Nouriel Roubini, an economics professor at New York University’s Stern School of Business, said earlier this month that bitcoin was a “gigantic speculative bubble.”
Katsunori Sago, the chief investment officer at Japan Post Bank, also recently called bitcoin a bubble, stating that bitcoin’s fair value should be around $100. Societe Generale Deputy CEO Severin Cabannes recently said bitcoin is clearly in a bubble, while Credit Suisse CEO Tidjane Thiam stated bitcoin is “the very definition of a bubble.”
Asked about bitcoin’s price gains this year, legendary investor Warren Buffet said there’s a “real bubble in that sort of thing.”
The most infamous quote of all is left to JP Morgan Chase CEO Jamie Dimon, who said bitcoin is a fraud. Morgan Stanley chairman and CEO James Gorman recently claimed that bitcoin “doesn’t quite deserve the attention it is getting.” At the same time, some Wall Street veterans are investing in bitcoin and launching cryptocurrency funds.
CME, the largest derivatives exchange, will introduce bitcoin futures in December.
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Last modified: July 13, 2020 3:10 AM UTC