CoinCorner's Views on the News tries to debunk many misleading news stories, along with giving an industry insiders view on the hottest topics and stories from around the bitcoin world.

Bill Gross Says Bitcoin, Blockchain May Counter Central Banks


Bitcoin and privately agreed upon blockchain technologies amongst a small set of global banks are just a few examples of attempts to stabilize the value of their current assets in future purchasing power terms,” he wrote. “Gold would be another example — historic relic that it is. In any case, the current system is beginning to be challenged – Bill Gross

Source: Bloomberg

So, is this a classic case of sour grapes or does Mr. Gross actually like the blockchain’s forbidden fruit? Let’s look at the facts.

He’s been running a successful bond fund since before bitcoin was even a mere twinkle in Satoshi’s eye. The guy is a billionaire. All is well… or is it? Along come the central banks with their low interest rates and all of a sudden the business of making a living from running a bond fund has suddenly got a little bit harder. Yields are compressing, investors are complaining and Billionaire Bill’s life has just got a little less rosy. Sure, he’s not quite at the food bank but these fund managers are all about their annual returns. Especially ‘annualised’ returns. You mess with a fund manager’s annualised return figure and you may as well sleep with their spouse.

Which brings us to the question: does Bill really love bitcoin or is he encouraging us all to stockpile bitcoin as veiled threat to those meddlesome central bankers that are messing with his annualised return? Is he, in effect, saying to those central bankers, “Hike interested rates or the world will all start buying bitcoin and then you’ll be sorry”?

Honest answer, I have no idea. It would be fascinating to know if Bill actually owned any bitcoin. Why the hell didn’t Bloomberg ask him that? Alas, I doubt we’ll ever find out unless anybody out there has sold him some bitcoin and cares to tell us… anybody?

So, short of Bill telling the world he owns a huge pile of bitcoin, I doubt we’ll ever find out. However, that’s not really the point. The mere fact that this titan of the investment world knows the benefits of bitcoin and isn’t afraid to publicly shout them from the rooftops is good for the brand that is bitcoin. Simply put, it adds credibility.

Indeed, as often happens to me, if the people at your next dinner party* think you are a crackpot for owning bitcoin, you can now tell them that so does your buddy Billionaire Bill (or so we suspect).

Leaving all of that to one side, the most interesting (and largely overlooked) aspect of this article is the mention of ‘negative interest rates’. Yes folks, that means you could deposit £100 in your bank account and when you got to withdraw it a year later there may only be £99 there. Ouch!

One of the biggest criticisms of bitcoin has been that you don’t get paid interest for holding it. Well, in a world of negative interest rates, all of a sudden that doesn’t seem like such a big deal.

* The author’s diary is free most weekends up until December and has no dietary requirements by the way. He’ll literally eat anything.

Disclaimer: The views and opinions expressed here represent those of the contributor, not necessarily those of CoinCorner.



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