Here’s How Popular Finance Experts Have Flip-Flopped on Bitcoin

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” - Eleanor Roosevelt
Here’s How Popular Finance Experts Have Flip-Flopped on Bitcoin
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

How the Experts Have Changed Their View on Bitcoin

One day Isaac Newton’s wife came to visit him in a room at the University of Cambridge where the great scientist performed his experiments. Upon entering the room, she noticed two holes in the door of different sizes. When inquired about those holes, Newton explained the constant interruptions caused to him by his cats’ scratches at the door.

That’s why he had a local carpenter drill those holes – a larger one for the mother cat and a smaller one for the kitten. Only after those holes were drilled, he realized the mistake that he didn’t need that second smaller hole as the kitten preferred to follow her mother and never used the smaller hole.

Whether it’s true or just a legend, it points to the fact that even the smartest brains are not always right. Well, today, we won’t be talking about the most intelligent brains, but about smart people who were wrong at times. The irony is – these people were supposed to know and understand investing and money far better than all of us muggles. Still, they turned out to be wrong about the very field they claim to be master of. Yes, we’re talking about the best performing asset in history—Bitcoin—and how all of these experts were wrong about it.

Today, we’ll discuss how renowned financial experts, including fund managers and financial executives, held an initially anti-Bitcoin stance—only to later move in a different direction. The majority of traditional financial experts had a diverse view (mostly negative) about bitcoin during its early days. However, the story has since changed.

Bitcoin Seen in a Different Light

Lary Fink, BlackRock

Let’s start with Larry Fink, the CEO of BlackRock, which has over $7.4 trillion in assets under management. Fink called Bitcoin an “index of money laundering” back in 2017. See for yourself, courtesy of CNBC:

News headline of BlackRock CEO Larry Fink's original position on Bitcoin that reads, "BlackRock CEO Larry Fink: Bitcoin an index for money laundering".

Now, with Bitcoin recently breaching its all-time high, he sees things in a different light. Today, he views Bitcoin as something that can evolve into a “global market asset”:

News headline of BlackRock CEO's changed stance on Bitcoin that reads, "Blackrock's Fink says bitcoin can possibly evolve into global asset:.

Jamie Dimon, JPMorgan

Even JPMorgan failed to see the underlying value of Bitcoin. Recall that in 2017, JP Morgan CEO Jamie Dimon called bitcoin a “fraud”. He went so far as to say, if any JPMorgan traders were caught trading Bitcoin, he “would fire them in a second, for two reasons: It is against our rules and they are stupid…”.

Well, that comment hasn’t aged well.

Nonetheless, Dimon continues to think poorly of Bitcoin, but has embraced its underlying technology. JPMorgan has since launched its own ‘JPM Coin’, a stablecoin designed for use in wholesale payments.

In addition, JPMorgan now offers banking services to several crypto exchanges.

Ray Dalio, Bridgewater Associates

There are still other notable fund managers whose views on cryptocurrency has changed over the years. Among them is Ray Dalio, co-chairman and founder of Bridgewater associates who in September 2017 described Bitcoin as a bubble:

More specifically, Dalio claimed,

“It’s very much speculative. People are thinking, ‘Can I sell it at a higher price? ‘so it’s a bubble … With Bitcoin, you can’t make much transactions in it, and you can’t spend it very easily. It’s not an effective store-hold of wealth because it has volatility, unlike gold.”

Now, Ray Dalio has recently admitted that he might be missing something when it comes to the asset. As Bitcoin’s price soared higher in the early days of November, Dalio tweeted the following:

Dalio certainly deserves credit for seeking a greater understanding of Bitcoin. He does seem a little late, however. Even traditional investment firm Fidelity offered to lend Dalio a helping hand:

Nonetheless, Dialo warns of governments banning Bitcoin should its momentum continue.

Niall Ferguson, Fmr Harvard and NYU Professor, Author

It is not only Ray that seems to be missing something in his analysis of Bitcoin.

Niall Ferguson, author of the currency book “The Ascent of Money,” admitted in March 2019 that he was wrong about not investing in Bitcoin when his teenage son told him to do so previously.

Ferguson was quoted as saying,

“I was very wrong, wrong to think blockchain technology was of no use.”

Taavet Hinrikus, TransferWise

Another notable figure who seems to have changed his stance on Bitcoin and blockchain technology is Taavet Hinrikus, CEO of TransferWise. In 2016, Hinrikus said,

Bitcoin, I think we can say, is dead. There is no traction; no one is using bitcoin. The bitcoin experiment, I think we can say, is over.

However, in July of 2020, Hinrikus was a top backer in a $4.1 million funding round for DeFi startup Radix. While this isn’t directly tied to Bitcoin, it does show how Hinrikus thinks of the asset’s underlying technology.

Further, with payments processing app PayPal adopting Bitcoin and other cryptocurrencies, it is reasonable to think TransferWise could eventually follow suit.

Final Thoughts

What was previously an asset with popularity among retail investors is now seeing adoption among institutional investors. Despite consistent criticism from some, other financial experts are now changing their tune.

Bitcoin has shown signs of maturity as well. In years past, high-profile hacks and legal action have typically caused Bitcoin’s price to drop—often significantly. This no longer appears to be the case, however.

Bitcoin has been on a rocket ship in 2020. The question now becomes, what will Bitcoin do in 2021?

What are your thoughts on Bitcoin, and its future in the coming year? Which financial experts do you think will change their tune on Bitcoin in 2021? We would like to hear your view in the comment section below.