What Wall Street said about Bitcoin in 2017

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Notable figures from the financial world, including bankers, financial analysts and investors have offered their views on Bitcoin and the cryptocurrency market during 2017. However, these views are not all aligned, with some investors being very bullish whilst others warned people against investing in this market.

The Bears 

Peter Schiff

Peter Schiff, president and CEO of Euro Pacific Capital, is one of the few financial figures who predicted the 2008 housing crisis. Despite being heavily invested in gold, Peter does not share the same views with regards to Bitcoin.

In an interview with CoinDesk when Bitcoin was evaluated at $4,000, Peter said:

“There’s certainly a lot of bullishness about bitcoin and cryptocurrency, and that’s the case with bubbles in general. The psychology of bubbles fuels it. You just become more convinced that it’s going to work. And the higher the price goes, the more convinced you become that you’re right. But it’s not going up because it’s going to work. It’s going up because of speculation.”

Jamie Dimon

Jamie Dimon is one of the main figures who has always been bearish on the cryptocurrency market. The CEO of JPMorgan Chase was speaking at a Barclays event on September 12th, when Bitcoin was trading around $4,000 and clearly explained the reasons for which this whole market is a bubble and people or even his employees should avoid investing in it.

In the following weeks, Jamie spoke against Bitcoin several times, but he recently said he “is done talking about Bitcoin”.

September 12th:

“It’s a fraud … It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”

September 22nd:

“Right now these crypto things are kind of a novelty. People think they’re kind of neat. But the bigger they get, the more governments are going to close them down.”

October 13th:

“If you’re stupid enough to buy it, you’ll pay the price for it one day.”

Ray Dalio

Ray Dalio, founder of the hedge fund firm Bridgewater Associates said in an interview on Sept. 19 that the speculation around bitcoin coupled with its lack of broad adoption are preventing it from becoming a true currency.

Ray Dalio is the founder of the hedge fund firm Bridgewater Associated and in an interview on September 19th, he said that the speculation and volatility around Bitcoin along with its lack of mainstream adoption is preventing this digital asset from becoming a true currency. As above, Bitcoin was trading at around $4,000 at the time.

“It’s not an effective storehold of wealth because it has volatility to it, unlike gold. Bitcoin is a highly speculative market. Bitcoin is a bubble.”

John Hathaway

John Hathaway, gold investor with Tocqueville Asset Management, said on September 21st that cryptocurrencies are garbage and that they would not take attention or money away from gold.

“Sure you can make money in bubbles any time but you have to get out. Let’s not forget that the total market value of these cryptocurrencies is $180 billion or so, maybe a little less now – that’s tiny compared to gold.”

Jordan Belfort

The “Wolf of Wall Street”, Jordan Belfort, came out on September 27th to back up Jamie Dimon, when Bitcoin was trading around the $3,900 mark.

“I’m not saying you should or shouldn’t buy bitcoin, but [what] I’m saying is I personally, myself, would be very, very careful about investing a lot of money in something that could vanish very quickly.”

Warren Buffett

Warren Buffett, perhaps the biggest financial figure to ever live and possibly the most notable one from those mentioned here, said on October 26th that Bitcoin and the cryptocurrency market is a “real bubble”.

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

Tidjane Thiam

Tidjane Thiam, CEO of Credit Suisse, made a few comments with regards to Bitcoin on 2nd November. He believes that the fact that Bitcoin transactions are anonymous represents a challenge for the whole cryptocurrency market.

“From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble.”

Carl Icahn
In an interview on the 1st of December, billionaire investor Carl Icahn compared Bitcoin and the cryptocurrency market to the Mississippi land bubble right before it collapsed. Bitcoin soared to $10,000 at that time.

“I got to tell you honestly, I don’t understand it … I just don’t get it. I just stay out of something if I don’t understand it.”

The Bulls

Bill Miller

Legendary hedge fund investor believes strongly in Bitcoin and the cryptocurrency market. His hedge fund, MVP1, doubled his investments in Bitcoin and Bitcoin Cash to nearly 50%. During a podcast, he said that his fund bought Bitcoin in 2013 and 2014 when it was valued at $350. However, at the time, only around 5% of his portfolio was invested in digital currencies.

Miller also took aim at those who have criticized the cryptocurrency, including Warren Buffet and Jamie Dimon above. According to Miller, neither of them had fully thought the topic through.

“I’m highly confident to say that not one of them had actually studied it carefully. That is to say, they have strong opinions about something they haven’t really looked at.”

Mike Novogratz

A former principal at Fortress Investment Group, long a fund with an interest in bitcoin, Mike Novogratz takes a more opportunistic approach.

Former principal at Fortress Investment Group, hedge fund billionaire Mike Novogratz takes a more oportunistic approach. After explaining that Bitcoin may have gone into bubble territory during 2017, he announced on September 26th that he would start a $500 million hedge fund focused on cryptocurrencies and the Blockchain technology.

“This is going to be the largest bubble of our lifetimes. Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”

Despite delaying plans for his hedge fund, Mike still remains bullish on the technology.

The academics

Financial experts and academics around the world raised questions with regards to Bitcoin being a speculative bubble and whether these cryptocurrencies can truly be evaluated in a rational model.

Aswath Damodaran

Aswath Damodaran, a finance professor at New York University’s Stern School of Business, also known as the Wall Street’s “Dean of Valuation”, wrote a blog post on 25th October in which he explained why he believed that cryptocurrencies would never be an asset class or a commodity.

“Bitcoin is not an asset, but a currency, and as such, you cannot value it or invest in it. You can only price it and trade it.”

Nouriel Roubini

Nouriel Roubini, economics professor at New York University’s Stern School of Business, said in an interview on 8th November with Business Insider Poland that this whole market is a “gigantic speculative bubble”. Shortly after, Bitcoin passed the $8,000 target.

“What’s more – it is also used by criminals, for their shady business. I think that more and more countries will start to make cryptocurrency exchanges illegal like China did. New regulations will be adopted. So, this will find its end.”

Joseph Stigliz

A former chief economist at the World Bank and now a professor at the Columbia University, Joseph Stigliz said on 29th November that the cryptocurrency market should be controlled by the governmental institutions and that the price increases are not sustainable.

“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.”

Robert Shiller

Robert Shiller is a Nobel prize-winning economist who also thinks that cryptocurrencies are a market that should be regulated by the government. He said in an interview that investors in these assets are not necessarily making decisions rationally since there’s no way to currently assess the real value of these coins. Bitcoin’s price skyrocketed to almost $20,000 over the weekend before his interview.

“I think the value of bitcoin is exceptionally ambiguous. You might think people who are educated will transform the decision problem into something precise … But it doesn’t seem like the brain is doing that.”

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