By Aparajita Saxena and Olivia Oran
(Reuters) – Goldman Sachs Group Inc <GS.N> Chief Executive Lloyd Blankfein said he is keeping an open mind on bitcoin after a media report that the investment bank was exploring a new trading operation dedicated to cryptocurrencies.
“Still thinking about #Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold,” Blankfein tweeted on Tuesday. (http://bit.ly/2xP543l)
The plan is in early stages and may not proceed, the Wall Street Journal report on Monday, citing people familiar with the matter. (http://on.wsj.com/2xMdWq8)
Blankfein’s tweet is in sharp contrast to comments made by JPMorgan Chase & Co <JPM.N> CEO Jamie Dimon, who called bitcoin a “fraud.”
Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services bypassing banks. The market is fraught with volatility, with bitcoin prices <BTC=BTSP> topping nearly $5,000 in early September and then declining sharply after Chinese authorities said they would ban the process of raising funds through launches of token-based digital currencies.
Speaking at a bank investor conference in New York last month, Dimon said, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
“It is worse than tulips bulbs,” Dimon said, referring to a famous market bubble from the 1600s.
Goldman’s arch rival Morgan Stanley <MS.N> spoke in favor of the currency, with CEO James Gorman calling it “more than just a fad.” (http://on.ft.com/2xMStNS)
Former Fortress Investment Group LLC executive Mike Novogratz is also starting a $500 million hedge fund to invest in digital currencies like bitcoin.
(Reporting by Aparajita Saxena in Bengaluru and Olivia Oran in New York; Editing by Anil D’Silva and Lisa Shumaker)