• The next Bit thing

The next Bit Thing

Updated: Apr 8, 2020

A topic that many individuals asked for my comments. As funky as it may sound, as trendy as it seems, the next big thing is small in size, in fact it is an imaginary metal - Bitcoin, the crypto currency. This article came just in time for me to share. From the tulip mania of the 17th century to the modern dotcom bubble, investors have followed irrational exuberance into despair more times than we can count. But we have never seen anything like Bitcoin.

Regulatory barriers and compliance issues have kept many big institutions from playing the Bitcoin boom. Some leaders are fine with that; others are impatient to pounce on the opportunity.

“If we have a trader trading Bitcoin, I would fire them in a second... it’s worse than tulip bulbs. It won’t end well. Someone is going to get killed... it’s a fraud”. James Dimon, CEO, JPMorgan Chase.

“I’m one of the few standing before you... from a large financial services company that has not given up on digital currencies. We set up a small Bitcoin and ethereum mining operation that now is actually making a lot of money.” Abigail Johnson, CEO Fidelity Investment.

“Still thinking about Bitcoin. No conclusion, not endorsing/ rejecting. Know that folks also were skeptical when paper money displaced gold.” Lloyd Blankfein, CEO Goldman Sachs.

“I’m not sure I would invest in Bitcoin itself, but it’s here to stay because of the disparity between countries where a monetary system is robust and countries where there is virtually no monetary system.” Arthur Levitt, Former Secretary Commissioner.

Some big players have decided these are risks well worth taking. Bubbles usually pop after the “dumb money” chases the smart money, but until now, it has mostly been individuals and small investors who have driven the Bitcoin phenomenon. Institutional investors are barred from those venues owing to fiduciary and compliance requirements around custody of assets. Bitcoin’s allure, in this view, is not about the money, per se, but about the technology.

Abstract from “How High Will Bitcoin Go?” Fortune.Com // Jan.18

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