2017 is the year of cryptocurrency. Its value immensely multiplied and, undoubtedly, investors are looking the speculate these currencies.
The popularity of cryptocurrency triggered several comments from “influential people” in the financial sector. Both positive and negative remarks emerged yet a common outlook is that the steep increase in the cryptocurrency’s value, with Bitcoin at the forefront, is worrisome. Moreover, they agree that blockchain which is propelling the back end proves beneficial and worthy of support.
The first one to talk about cryptocurrency is Jamie Dimon, CEO of JPMorgan Chase. Some may have read about it because Dimon’s comments were quite assertive resulting in widespread attention.
A brief introduction about JPMorgan Chase is a largest private bank in the USA and ranks 6th for banks with the highest total assets in the world (the first 4 is in China, Japan is 5th, therefore JPMorgan Chase is the largest western bank in the world). Jamie Dimon is the CEO on the top of that pyramid, therefore, his comments are quite interesting.
Moreover, Dimon is a financial CEO with a good knowledge of technology. He is well-known for his reminder for the financial sector to be aware of competition from IT companies (his golden quote was “Silicon Valley is coming”).
Dimon first spoke about bitcoin in September 2017. He uses straightforward words like fraud and mentioned that it is worse than the Dutch Tulip Bulb Market Bubble. Also, he mentions that it will soon be regulated by the government sector. However, he supports blockchain technology and admits that it is beneficial. Yet more time is needed before the financial sector can utilize them to the fullest capacity.
After this comment, Dimon gave several interviews regarding bitcoin with similar ideas and minor changes in the details.
Another commentator on bitcoin is Ben Bernanke who previously served as Chairman of the Federal Reserve. He used to be at the forefront influencing the world economy.
Today, Bernanke has retired from the public sector but still works in the academic field. He mentions that bitcoin seems to be avoiding government scrutiny and has not been used in actual transactions but are mainly used for speculations.
Bernanke’s notion is similar to Dimon’s that in the future, regulators from all over the world will begin to control these currencies. Similarly, he sees that the blockchain is a useful tool that will help enhance the financial sector.
Reminders regarding speculation bubbles for bitcoin and cryptocurrency has been ongoing. UBS in Switzerland also launched an analysis confirming that bitcoin is a “speculative bubble” and are unlikely to become mainstream currencies.
UBS explains that this is because cryptocurrency trade is greatly higher than the actual usage meaning that buyers are looking for speculative gain and not actual transactions.
Another interesting viewpoint is that cryptocurrency is limitless as they can always be created. Therefore, the supply can be misleading as any currency can be replaced by newer currencies.
These are opinions from influential experts and leading financial institutions towards cryptocurrency which I think is worth considering.