Nov. 22, 2017 (The Ferowich Report) — A plurality of the top chief financial officers in the world agrees with the increasing popular concept that bitcoin is a brand new asset class but opinions about the cryptocurrency’s future continue to lack consensus.
The nitty gritty: A new poll asked CNBC’s Global CFO Council of 97 executives representing firms including Wells Fargo, Facebook, the Stock Exchange of Thailand, BNP Paribus, and the National Bank of Abu Dhabi what they think about bitcoin’s future. About 44 percent, 43 of the 97 execs, participated in the survey.
Among those who agreed to take the survey:
- 41.9 percent of CFOs said bitcoin was a “real” asset. Of those who think bitcoin represents a new asset class, 27.9 percent said bitcoin is “in a bubble” while the other 14 percent said it will “still go higher.”
- Another 27.9 percent said bitcoin is a “fraud.”
- 30 percent of CFO’s stated they didn’t know enough about the currency to form an opinion.
One noteworthy feature of the study is taking the term “bubble” for granted without defining what it means. Wall Street’s dean of valuation, Aswoth Damodaran, contends bitcoin isn’t actually an asset, so therefore it’s impossible to say bitcoin is experiencing an asset price bubble. Instead, the NYU professor views it as a currency, since it doesn’t have underlying cash flows like bonds and companies do.
Map it out: Of the 43 responders, 24 were US-based, another 10 hailed from Europe, the Middle East, and Africa, while 5 represented companies in the Asia Pacific region.
Background: The price of bitcoin has struck new highs above the $8,000 price level after beginning 2017 around $1,000. Mainstream adoption of bitcoin for derivatives contracts at the Chicago Mercantile Exchange and LedgerX have facilitated bitcoin’s meteoric rise.