Morgan Stanley Executive Chairman James Gorman said that buying Bitcoin is purely speculative, that last spring’s bank failures were no big deal, and that the United States may not experience a recession this year. Gorman just stepped down as CEO on January 1 after 14 years at the helm of Morgan Stanley. “I’ve never really understood the value of Bitcoin as a store of value,” he said in an interview this week.
Gorman continued: "I once joked that I wish I bought it for $60, and I'm glad I didn't buy it for $60,000. For wealthy people, it should play a very small role in their financial structure because it's so speculative, so volatile, and it's been subject to huge regulatory changes and industry disruptions again - some of the classic failures we've seen recently."
From March 2020 to November 2021, the price of Bitcoin surged approximately 12 times, from approximately $5,000 to more than $60,000. The most popular cryptocurrency briefly fell below $17,000 by the end of 2022, but rebounded to over $40,000 by the end of 2023.
The cryptocurrency space has been plagued by regulatory crackdowns and multiple scandals in recent years, including the dramatic downfalls of FTX and Sam Bankman-Fried.
Gorman said: “Listen, Bitcoin is not going away, it’s not a fad. But I don’t think it’s a core investment. I think it’s a speculative asset and people have a lot of options in that regard.”
In addition, the Wall Street veteran attributed the collapse of Silicon Valley Bank, Signature Bank and Silvergate Capital last March to poor management decisions and believed that fears of an industry-wide disaster at the time were exaggerated.
He said: "People keep telling me we are facing a banking crisis - no we are not, we are facing a crisis between three banks. "This is not a crisis in the market. "
Gorman was also optimistic about the outlook for the U.S. economy, citing rapidly declining inflation, resilient output growth and historically low unemployment.
"We're unlikely to have a recession, we're unlikely to have a hard landing," he said, adding that he expected the Federal Reserve to cut interest rates several times in the second half of the year to boost economic growth.