One of Asia’s largest banks has come out and criticised bitcoin, calling the digital currency a ‘ponzi scheme,’ making it the latest to join a growing list of others who are against the cryptocurrency market.
David Gledhill, group chief information officer and head of group technology and operations at Singapore-based DBS Bank, said to CNBC on the sidelines of the Singapore Fintech Festival, that:
We see bitcoin as a bit of a ponzi scheme.
Gledhill argued that the digital currency’s transactions are ‘incredibly expensive’ and that ‘all the fees are hidden through the crypto-mechanisms,’ adding:
We don’t think DBS being in that game right now is going to create a competitive advantage for us.
According to Gledhill, it makes more sense to focus on electronic transactions of government-backed currencies.
Gledhill is certainly not the first individual nor is he likely to be the last who holds a negative view of the cryptocurrency market.
Jamie Dimon, JPMorgan Chase CEO, is well known in the community for calling bitcoin ‘a fraud’ and that it’s ‘worth nothing.’ Others that have called the digital currency a ponzi scheme include bestselling author Jim Rickards and Maxim Oreshkin, Russia’s Minister of Economic Development, who has compared bitcoin’s price to that of MMM, a former Russian ponzi scheme. More recently, Brazilian central bank president Ilan Goldfajn has also taken a dismissive view of bitcoin, calling it a ‘bubble or a pyramid scheme.’
According to Chris Burniske, a prominent analyst and Placeholder Venture Capital partner, the digital currency does not fall under the definition of a ponzi scheme. Taking to social media last month, Burniske, said:
If you think #bitcoin is a Ponzi scheme, then follow your logic and you’ll find society is a Ponzi.
Yet, despite the negativity that the currency receives it is still attracting investors to it.
However, while this is the case, it remains a volatile asset. Last week, bitcoin scaled to $7,800 for the first time, which was pushed along by market events. These included the CME Group revealing that it would be launching a bitcoin futures by the end of 2017 as well as the announcement that the organisers of SegWit2x had suspended the planned upgrade due to a lack of consensus. Yet, shortly following the SegWit2x suspension, bitcoin’s value dropped to $5,500 last weekend as the market reacted to this change of events.
Since then, though, the value of the cryptocurrency has risen and is currently trading at over $7,500, according to CoinMarketCap.