Bitcoin is by definition speculative, there are issues around it, but it’s not a fad and it’s not going away overnight, James Gorman, Chairman and CEO of Morgan Stanley, told CNBC in an interview.
In an interview with CNBC at the Morgan Stanley Asia Pacific Summit in Singapore, James Gorman said that bitcoin is, indeed, thriving but that the interest the cryptocurrency garners is undeserved.
“It’s obviously something which now everybody loves to have an opinion on and bitcoin I’d say is punching above its weight OK. It doesn’t quite deserve the attention it’s getting,” Gorman told CNBC.
According to the Morgan Stanley CEO, bitcoin is a speculative bubble, and thus an unstable investment, just like everything with a 700 percent rise on the year.
“If something goes up 700 percent in a year, it’s by definition speculative. So anybody who thinks that buying something that it’s a stable investment is deluding themselves. It might go up another 700 percent but it could easily not. So bitcoin is by definition speculative,” Gorman said.
Gorman is unsure whether bitcoin is needed as a new form of stored value and suggests that regulation might prove to be the cryptocurrency’s downfall. However, the Morgan Stanley CEO believes that bitcoin is not a fad and will not be disappearing overnight, thanks to growing acceptance.
Morgan Stanley bitcoin stance, less negative that those of his peers
“The question is, as acceptance is growing with bitcoin and user ability is growing clearly it’s not going away. That’s what I meant by a fad. Is it a needed new form of stored value? I’m not so sure. Will the regulators and the central banks just watch this from a distance? I’m not so sure. Does it support people who want to use currencies on an anonymous basis for wrong purposes? Absolutely, so there are issues around this but it’s not a fad it’s not going away overnight,” Gorman added.
Asked about the risks posed by automation in the banking sector, Gorman mentioned cryptocurrencies as one of the disruptive forces threatening the sector.
“A lot of what we do in finance is very sophisticated, requires human intellect and judgment. So I’m not at a point where I think the whole thing is being transformed. (…) That said, we’re looking at not just automation, but digital, cyber, cryptocurrencies, all of the evolutions that are taking place in our sector, and coming at us not in onesies and twosies but these are five or six major forces at work in the sector,” the Morgan Stanley CEO said.
James Gorman previously described bitcoin as “more than just a fad”, saying that he does not think the cryptocurrency should be illegal, but that there is “a sort of government risk factor to it”.
Gorman’s comments contrast with the views expressed by some of his peers in the financial spheres. For instance, JPMorgan Chase CEO Jamie Dimon called bitcoin “a fraud” and predicted that governments will eventually crack down on it.
Morgan Stanley bitcoin stance – Image source: Reuters