Blankfein Says Don’t Dismiss Bitcoin

Lloyd Blankfein on bitcoin during an interview with Bloomberg’s David Westin

Lloyd Blankfein isn’t sure what to make of bitcoin.

While the Goldman Sachs Group Inc. chief executive officer says he isn’t willing to reject the digital currency just yet and doesn’t hold any investments in the digital coin, he can see a world in which bitcoin is a form of currency.

“I read a lot of history, and I know that once upon a time, a coin was worth $5 if it had $5 worth of gold in it,” Blankfein said in an interview Thursday with Bloomberg TV. “Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus.”

The digital currency got new impetus this week after CME Group Inc., the world’s largest exchange owner, said it plans to introduce bitcoin futures by the end of the year, citing pent-up demand from clients. Skeptics including Themis Trading say the rally is evidence that the software-created asset is a bubble that should not be given regulatory cover.

The speculation around bitcoin is the “very definition of a bubble,” Credit Suisse Group AG CEO Tidjane Thiam said at a news conference in Zurich Thursday.

“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,” Thiam said. He added that in the history of finance, such speculation has “rarely led to a happy end.”

Blankfein tweeted last month that while the was “still thinking” about bitcoin, people were once skeptical of paper money as well.

“I’ve learned over the years that there’s a lot of things that workout pretty well that I don’t love,” he said today. Bitcoin certainly has been doing well in 2017, rising more than 600 percent since the start of the year and surpassing $7,000 for the first time.

And the Goldman Sachs CEO isn’t the only one pulling a Hamlet act over bitcoin. What was once dismissed by Wall Street as a speculative bubble has been suddenly coming up more frequently, both in positive and negative tones. JPMorgan Chase & Co. CEO Jamie Dimon famously said that he would fire any trader who began trading bitcoin.

“I don’t have an investment in it, but I’m not willing to pooh-pooh it and that’s why I say I’m open to it,” Blankfein said.

— With assistance by Andrew Dunn

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