Is bitcoin a legitimate asset, or a super-bubble waiting to implode? As prices for the cryptocurrency skyrocket, investors and pundits are increasingly taking sides.
Whether you are a backer or a detractor, what is not in doubt is bitcoin’s dizzying rally this year.
The most widely used digital currency crossed the US$7,000 mark on Thursday and is up more than 650 percent this year.
Photo: Bloomberg
It has managed to whip past the US$100 billion total value mark, despite governmental crackdowns and mainstream market skepticism.
Bitcoin was trading at US$7,218 at 9:37am in New York on Friday.
With the rhetoric for and against heating up this week amid bitcoin’s barreling gains, here is a look at where some big names in finance stand — from those who see it as the natural evolution of money, to the naysayers waiting for the asset to crash and burn.
BACKERS
The digital currency’s evangelists are led by Roger Ver, known in the industry as “Bitcoin Jesus.”
Ver remains optimistic about bitcoin’s sustainability amid attempts from governments like China to curb some of the more speculative elements of trading.
“The only way to stop [bitcoin] is to turn off the entire Internet in the entire world and keep it turned off,” he said in a September interview with Bloomberg News.
Some countries are jumping on the bitcoin bandwagon, with Argentina’s most important futures market considering offering services to investors in digital currencies, while Turkish Central Bank Governor Murat Cetinkaya said digital currencies might contribute to financial stability if designed well.
Ronnie Moas, who for the past 13 years has made more than 900 stock recommendations via his one-man show at Standpoint Research, upped his next year’s price forecast to US$11,000 from US$7,500 on Friday.
He maintained his US$50,000 target for 2027, though he said it was conservative.
DETRACTORS
Societe Generale SA deputy chief executive officer Severin Cabannes was the latest big bank official to weigh in, saying that “Bitcoin today is in my view very clearly in a bubble,” in a Bloomberg Television interview on Friday.
Speculation around bitcoin is the “very definition of a bubble,” Credit Suisse Group AG chief executive officer Tidjane Thiam told reporters in Zurich on Thursday.
“The only reason today to buy or sell bitcoin is to make money,” and such speculation “has rarely led to a happy end,” Thiam said.
Themis Trading LLC raised a red flag this week after CME Group Inc announced plans to introduce bitcoin futures, saying the world’s largest exchange owner appeared to have “caved in” to pressure from clients.
“A bitcoin future would be placing a seal of approval around a very risky, unregulated instrument that has a history of fraud and manipulation,” the firm said in a blog post.
JPMorgan Chase & Co chief executive officer Jamie Dimon remains one of Wall Street’s most strident bitcoin opponents, saying last month that people who buy the currency are “stupid” and that governments will eventually crush it.
ON THE FENCE
While CME’s decision to offer bitcoin futures by the end of the year appears to be an endorsement of the currency’s viability, chief executive officer Terry Duffy demurred when asked whether he is concerned about a potential bubble.
“I’ve seen a lot of different bubbles over the last 37 years,” he said on Bloomberg TV. “It’s not up to me to predict if it’s a bubble or not — what I’m here to do is to help people manage risk.”
Goldman Sachs Group Inc chief executive officer Lloyd Blankfein is not sure what to make of bitcoin and is unwilling to reject the digital currency just yet.
“I know that once upon a time, a coin was worth US$5 if it had US$5 worth of gold in it,” Blankfein said in another Bloomberg TV interview. “Now we have paper that is just backed by fiat ... maybe in the new world, something gets backed by consensus.”
While Thomas Lee of Fundstrat Global Advisors has turned cautious on bitcoin in the short term because of its big gains, he remains a long-term bull on the digital currency — maintaining a 2022 price target of US$25,000.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to