In an interview with CNBC, Blankfein said that “maybe bitcoin is a kind of a bubble,” adding: “I don’t like it. I’m not comfortable with it. I’m kind of an old dog to be absorbing that kind of a new trick.”
Last month, Goldman Sachs compared key characteristics of gold and bitcoin, and revealed that when it comes to being assessed on the majority of the key characteristics of money, gold is the clear winner.
The report noted that when it comes to durability, gold wins, because cryptocurrencies are vulnerable to hacking and are subject to regulatory, network and infrastructure risk during a crisis. In terms of intrinsic value, there’s a limited supply of gold and other precious metals in the Earth’s crust, whereas in the case of cryptocurrencies, it’s easy to create alternatives through initial coin offerings (ICOs). What’s more, gold is better at holding its purchasing power and has a much lower daily volatility, while bitcoin/dollar volatility has averaged almost seven times that of gold in 2017.
Blankfein certainly isn’t the only CEO to criticize the digital currency. JPMorgan Chase CEO Jamie Dimon called bitcoin “a fraud,” while BlackRock CEO Larry Fink said it was an “index of money laundering.”
Despite its naysayers, bitcoin has soared more than 600 percent this year. On Thursday (Nov. 9), the cryptocurrency traded down 3.9 percent at $7,172.80, but remained near a record high.
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And although he has his reservations, Blankfein did not say the digital currency would fail, noting that “the list of things that are conventional today that I use every day that I thought would never make it is a very long list. If it works, I say to myself, ‘Hmmm, maybe that was a natural progression from hard money to fiat money to consensus money.’ So, who’s to say?”
