Asia Banking Giant Labels Bitcoin a ‘Ponzi Scheme’
One of Asia’s most prominent banking institutions has called bitcoin a ponzi scheme, signaling continued resistance to one of the most groundbreaking developments in recent history.
DBS Bank Calls Bitcoin a Scam
“We see bitcoin as a bit of a ponzi scheme,” David Gledhill, chief information officer at DBS, told CNBC on Wednesday.
Bitcoin is already too expensive with multiple fees “hidden through the crypto-mechanisms,” he said while attending an event in Singapore. In his view, entering the bitcoin space doesn’t make much sense for DBS at this stage in the game.
Despite calling bitcoin a scam, Gledhill did acknowledge that the digital payment system will eventually scale. This will bring much needed efficiency and affordability to a space that he believes has run amuck.
DBS, or the Development Bank of Singapore, has 482 billion SGD in total assets. It is one of the region’s biggest lenders, with over 200,000 institutional banking customers and over seven million consumer banking/wealth management customers. The bank employs more than 22,000 people.
Of course, the views expressed by Gledhill are nothing new. JP Morgan Chase CEO Jamie Dimon regularly rips on bitcoin, even calling its investors “stupid.”
Then there’s Dennis Gartman, the commodities guru who has taken an extremely negative stance on cryptocurrency. In a recent interview with CNBC, Gartman said bitcoin is a market for criminals and millennials. (We’re not sure whether the latter is supposed to be an insult.)
“How can you buy or sell a painting using bitcoin, when the change in volatility is 20-30-40 percent in the course of a week? It’s nonsense,” he said.
Bitcoin Price Levels
Naturally, bitcoin’s dramatic appreciation has caught many sensible market participants by surprise. The coin has added more than 600% this year, and has reached multiple record highs in the process.
Bitcoin faced an extreme selloff last week as prices shed more than $1,200. However, the market has quickly regained its footing, with BTC/USD valued back to trading in the $6,800-$6,900 range. At press time, bitcoin was up 5% at $6,850.28.
Factoring in current price levels, bitcoin is capitalized at roughly $114.7 billion, with 24-hour trading volumes exceeding $3.3 billion.
Blockchain alternative Bitcoin Cash (BCH) also gained ground on Wednesday, rising 3.5% to $1,322. The BCH hard fork surged to record highs last week after backers of Segwit2x abandoned their mission to upgrade the original blockchain. BCH’s market cap is currently sitting at $22.2 billion. Its total value peaked above $30 billion last week.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrency. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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