Bitcoin price (BTCUSD): US banks likely “very afraid” of Bitcoin, wealth advisor says

on Sep 20, 2017
Updated: Mar 11, 2020

Rainer Michael Preiss, executive director at Taurus Wealth Advisors, said that heads of US banks were likely “very afraid” of Bitcoin, CNBC has reported.

“Of course, if you run a very large U.S. bank, most probably you are afraid of blockchain and bitcoin,” Preiss said, as quoted by CNBC.

Preiss argued that cryptocurrencies could present investors with a viable alternative given the uncertainty from banking’s lack of transparency.

“The concerns are about the fractional reserve banking system, and the balance sheet of the Federal Reserve at $4.5 trillion, where the Fed officially refuses an audit,” he added. “On the other hand, on the bitcoin blockchain, you have an audit everyday because it’s open-sourced.”

The wealth advisor’s comments came after the CEO of JP Morgan Chase Jamie Dimon slammed the cryptocurrency, calling it as a “fraud” and “worse than tulip bulbs”. In fairness to Dimon, his criticism was levelled at the cryptocurrency and not its underlying technology, the blockchain, which, he reckons, could be useful. Nevertheless, his negative comments likely contributed to last week’s cryptocurrency slump.

Preiss also pointed to the rise of the Bitcoin price in the past couple of years as a sign that the cryptocurrency is “a good store of value” for some investors.

A number of prominent figures in the investment circles, however, see the Bitcoin rise, especially this year, as a sign the cryptocurrency is in a bubble. Yesterday, Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, expressed similar concerns.

“It’s not an effective storehold of wealth because it has volatility to it, unlike gold,” Dalio said on CNBC’s programme Squawk Box. “Bitcoin is a highly speculative market. Bitcoin is a bubble.”

He noted that Bitcoin “could be a currency”, but it is hindered by speculation and the lack of wider adoption.

In today’s trading, the Bitcoin price stood at $4,021.22, as of 15:33 BST. The cryptocurrency has gained just over 1% over the past 24 hours.

For further information on how to buy and trade Bitcoin, see our comprehensive Bitcoin guide.