Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .




Bitcoin has followed a volatile path to growing acceptance since its creation in 2009 with its price fluctuating between USD 0.30 and 1135 in its short existence. But bitcoin is now accepted as payment by a growing number of mainstream merchants and has been increasingly legitimized by governments such as that of the United States, which auctioned off 30,000 bitcoins in June.

In this interview Finance expert Arturo Bris analyses the risks associated with bitcoin.

Is there a speculative bitcoin bubble?

Arturo Bris: This is one of bitcoin’s major risks. The reason is that its supply is restricted. Unlike normal currencies, central banks cannot issue additional bitcoins when there is excessive demand from the market. I would call it a “rational bubble” similar to what happens in real estate markets, because the rise in prices is not caused by traders’ irrational behavior.

I suspect bitcoin is the typical instrument where at some point small, unprotected investors get caught and bear the big cost of a Ponzi scheme type of event. This could happen if the current liquidity in the bitcoin market vanishes. Big financial institutions would not come to the rescue. Banks don’t speculate with currencies, especially now that they are heavily regulated. And they will only enter into the bitcoin market once it is sanctioned by central banks and regulators, something that is unlikely to happen.

Do you see bitcoin posing any threat to the economy or traditional currencies?

Arturo Bris: An economy can adjust naturally to a new currency. We saw that in 2001 with the Euro. As with traditional currencies, certainly bitcoin—if successful—will hurt the weaker currencies the most. I doubt it will challenge the dominant position of the dollar, the euro or the yen.

Is bitcoin an ideal currency for illegal activity?

Arturo Bris: Quite the opposite. The ultimate owner of any single unit of bitcoin can be tracked through a central system, and any transaction is automatically recorded. This does not happen with traditional money.

Why has bitcoin grown in popularity and acceptance?

Arturo Bris: Consumers do not trust financial markets. There was a need to find innovative solutions to serve their financial needs.

Arturo Bris is Professor of Finance at IMD and directs the IMD World Competitiveness Center.

On October 2, IMD will host an event entitled “Bitcoin: Boom or Bust” featuring a debate between Arturo Bris and “Bitcoin Jesus” Roger Ver, the controversial millionaire bitcoin investor.

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post