Ex-CEO of Prudential Securities, former Bitcoin hater, reconsiders

The Fed’s endless money printing has inspired a former opponent of Bitcoin to urge investors to invest in the cryptocurrency. But Vitalik Buterin has wise words for anyone getting into the DeFi craze on Ethereum: “it's likely best to sit out,” he tweeted yesterday. 

George Ball, Chairman at investment firm Sanders Morris Harris and former CEO of Prudential Securities, said in an interview with Reuters yesterday that Bitcoin is the safe bet for the big investor. 

Ball was asked how investors could make adjustments to their portfolios during uncertain times like now—and ended up supporting the biggest cryptocurrency by market cap. 

“I've never said this before, and I've always been a blockchain, cryptocurrency, Bitcoin opponent,” he told Reuters during a video interview. “But if you look right now, the government can't stimulate the markets forever.”

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He added: “Are they going to raise taxes that high? Or if not, are they going to print money? If they print money, that debases the currency and probably even things like TIPS—treasury inflation-protected securities—can be corrupted. 

“So the very wealthy investor or the trader probably turns to Bitcoin or something like it as a staple.” Ball’s response shocked Reuters reporter Fred Katayama who said: “Wow, I never thought I'd hear you say that.” 

Bank Ball-out 

The bet on Bitcoin from a traditional finance bigwig comes at a time when more institutional investors than ever before are placing their bets on the asset. At the start of this week, the open interest on the Chicago Mercantile Exchange’s (CME) Bitcoin futures hit a new high of $841 million. 

It is thought the increased interest from traditional investors is in part due to widespread money printing of the world's central banks—which makes Bitcoin appear to be a safe bet to some. 

Ball’s commentary comes at a time when Warren Buffett feels less comfortable betting on banks—and more on other assets. 

His investment firm, Berkshire Hathaway, said Friday that it had reduced its stakes in major US banks—selling some 85.6 million Wells Fargo shares (26% of its stake) and 35.5 million shares of JPMorgan (61% of its total stake). The firm instead bet on gold—acquiring nearly 21 million shares of Barrick Gold worth $563 million. 

But in the crypto world, Ethereum creator Vitalik Buterin made a warning to investors wanting to hedge their bets on different assets—specifically, decentralized finance (DeFi). 

“You do NOT have to participate in ‘the latest hot DeFi thing’ to be in Ethereum. In fact, unless you really understand what's going on, it's likely best to sit out or participate only with very small amounts.,” he said on Twitter Friday. 

Ball: don't get ahead of yourself.

Editor's note: A previous version of this article referred to Mr. Ball as the former CEO of Prudential Financial. He is the former CEO of Prudential Securities. We regret the error.