The chairman and CEO of Morgan Stanley has said that anyone who thinks bitcoin is a stable investment is ‘deluding themselves.’
In an interview with CNBC, James Gorman said that the digital currency wasn’t a safe investment and owners of it shouldn’t expect otherwise.
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.
He added that even though it could go up another 700 percent, it could just as easily not as well.
His comments come at a time when bitcoin is experiencing a renewed surge in price. Last week, the digital currency reached the $7,800 milestone for the first time following news of the suspended SegWit2x. However, over the weekend it dropped to $5,500. Since then, though, it has steadily risen in value. According to CoinMarketCap, it is currently trading at over $7,400, with a market cap worth $124.8 billion. With confidence returning to bitcoin its market price is seeing a positive return to previous highs.
Despite this, though, Gorman added that bitcoin was ‘punching above its weight’ and that it ‘doesn’t quite deserve the attention it’s getting.’
These comments are in stark contrast to his previous ones regarding the digital currency. The banker said in September that bitcoin was ‘more than just a fad.’ At the time he stated that while the cryptocurrency was ‘highly speculative,’ it wasn’t something ‘inherently bad.’
He still appears less negative toward the market compared to fellow Wall Street banker Jamie Dimon, JPMorgan Chase CEO. In September, Dimon stated that bitcoin was ‘a fraud,’ later claiming that it was ‘worth nothing.’
These comments from bankers shouldn’t come as a surprise though. After all, they have much to lose if the crypto market fully takes off and leaves them behind. With digital currencies it’s now possible to transfer money to people abroad in a short period of time. This is compared to the days it takes via traditional bank transfers. Not only that, but the fees involved a minimal as well unlike a bank’s.
According to David Johnson, CEO and co-founder of Latium, a new digital currency platform, the digital currency market will change how money is used forever. In a report, Johnson said that the cryptocurrency revolution has begun, adding:
Ten years from now the financial world will look very different to what it is now.
It’s already looking very different than what it was several years ago.