Bitcoin
Bitcoin is a controversial topic right now. There’s a whole bunch of influential people who think the currency is a singularly bad idea, so here we take a look at just some of their main arguments.
Christine Lagarde
The safest place for money is the Central Bank.
The amount of electricity Bitcoin uses is huge. It’s also used to launder money and finance terror. Christine Lagarde, the first woman to head the European Central Bank, makes no secret of the fact that she’s no fan of Bitcoin. She’s made the creation of a digital central bank currency a priority, thus pulling the rug out from under the feet of Bitcoin fans, who fear more government control and the spread of negative interests to their accounts. The ECB argues that the digital euro would require much less energy use than the cryptocurrency and central bank money is “the safest money there is”.
Hillary Clinton
Former First Lady, US Secretary of State and Presidential Candidate
Bitcoin jeopardises the role of the US dollar.
The fact that Hillary Clinton, still one of the most influential and best-known political voices in the US, should speak out on cryptocurrencies at all shows how important the topic has now become. The former Secretary of State is no fan of Bitcoin, worrying first and foremost about the “position of the US dollar” in the world. Without actually mentioning Bitcoin by name, she said: “Cryptocurrencies could destabilise entire countries. First smaller countries, but then bigger and bigger ones.”
Nassim Taleb
Writer and financial mathematician
Bitcoin has failed as a currency.
Nassim Taleb popularised the term “black swan”, describing unforeseen events on the stock market having a huge effect nobody saw coming. Taleb used to be a Bitcoin fan and even wrote the foreword for a book on the subject, The Bitcoin Standard. He’s also described Bitcoin as a back-up option against governments abusing their currencies, but in the past two years he’s sold his Bitcoin, bemoaned the volatility of the exchange rate and called Bitcoin fans idiots on Twitter. He’s now come up with his own Black Paper, in answer to Satoshi Nakamoto’s White Paper. In it, he concludes that Bitcoin’s long-term value is “precisely zero” and that Bitcoin has failed as a back-up option and currency.
Recep Tayyip Erdoğan
President of Turkey
It weakens influence over the Central Bank.
Recep Tayyip Erdoğan is very open about his hatred of Bitcoin. He even sees Turkey as “at war with Bitcoin,” and that isn’t entirely wrong from his point of view. The autocrat flexes his power wherever he can, including influencing the monetary policy of the Turkish Central Bank. He has on multiple occasions fired central bankers who won’t pander to his wishes for ever lower interest rates. The consequence: the country has been struck by an almighty inflation crisis, the value of the Turkish lira plummets ever lower and people suffer. A breakdown of the Turkish population points to a great number of young people and the use of Bitcoin and other crypto assets is extremely high. Erdoğan can take action against the stock exchange but he can’t forbid the ownership of Bitcoin.
Nouriel Roubini
Economist
Bitcoin is neither fair nor equitable.
Nouriel Roubini was known as Dr Doom because he warned the housing market bubble would burst and cause the financial crisis of 2008 long before it happened. But he can’t take Bitcoin seriously. Roubini calls the digital currency the mother of all bubbles and sees little to gain from arguing with crypto fans. For example, he doesn’t see access to financial services as being more equitable; instead, the original programmers have too much power over the currency and can, among other things, undo transactions that are supposedly immutable.
Bitcoin is neither free nor equitable because ultimately a few people will end up owning a majority of all the Bitcoin out there. Traditional financial systems are not anonymous or decentralised but at least they are secure. If, say, a credit card gets stolen, the owner is reimbursed; if a crypto owner loses their private key, the assets are gone.
Warren Buffett
Entrepreneur and investor
Bitcoin is an illusion and lies.
The 91-year-old stock investor rejects Bitcoin, saying:“ I don’t have any Bitcoin. I don’t have any cryptocurrency and that won’t change.” Buffet is one of the richest men in the world and the fact he stayed away from Wall Street throughout his life as an investor and chose to remain in Nebraska made him an American folk hero. His words have weight, that’s for sure. Bitcoin is illusion and lies, according to Buffett, and has no unique value because it produces nothing. “You stare at it all day and little Bitcoins come out,” he said. “Or something like that. It’s delusional.”
Xi Jinping
President of the People’s Republic of China
Bitcoin cannot be monitored by the state.
China’s strongman has already tried to get rid of Bitcoin on multiple occasions. His regime in Beijing is tightening the reins wherever it can. Celebrities disappear, tech entrepreneurs like Alibaba-founder Jack Ma are nowhere to be seen and a digital central bank currency is intended to oust private providers (Alipay and WeChat Pay) from payment transactions. As a result, Bitcoin doesn’t fit the bill at all. It not only allows the Chinese to build up capital outside of the closely monitored surveillance state, but also to get that capital out of the country.
The hardest knock came last year when China outright forbade Bitcoin mining. The miners fled to Kazakhstan and Europe but primarily to the US, where some states – Texas and Wyoming – welcomed them with open arms. Possessing cryptocurrencies is still legal in China; the question is, for how much longer?
Janet Yellen
United States Secretary of the Treasury
Investors in Bitcoin lose their money.
The former head of the Federal Reserve already goes back a long way with Bitcoin. She fell prey to a prank in the summer of 2017. While she was testifying to Congress, a man in the background held up a sign he had made himself that could be seen on TV. The message was simple. “Buy Bitcoin!” The man was promptly bundled out of the room by the security personnel. In early 2021, when Bitcoin was again making headlines, she had stinging criticism. Bitcoin was an “extremely inefficient way to transfer money,” said Yellen. “It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer.” The current Secretary of the Treasury prefers digital money from the central bank. “It could make payments quicker, safer and cheaper. Those are important goals.”
Jamie Dimon
CEO und Chairman of JPMorgan Chase & Co.
Bitcoin has no future.
The head of JPMorgan Chase & Co, the largest bank in the US, has a very complex relationship with Bitcoin. “I personally think that Bitcoin is worthless,” he said in October 2021. But his bank has long since offered products related to Bitcoin and crypto. “Our clients are adults,” he said. “If they want to have access to buy or sell Bitcoin, we can’t custody it.” He shares the position of some other Wall Street titans who think that sooner or later states will start banning Bitcoin and it will be done away with. “There will be no real non-controlled currency in the world,” he said. “There’s no government that’s gonna put up with it for long.”
