New financial technologies such as bitcoin may become increasingly attractive to investors as a protection against central bank low- and negative-interest-rate policies that threaten capitalism, according to billionaire bond manager Bill Gross.
Policies by the Federal Reserve, Bank of Japan and European Central Bank are destroying historical business models that foster savings, investment and economic growth, Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, said in an October investment outlook released Tuesday. He said that as investors lose faith in the system, they will increasingly seek havens.
“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.”
Blockchain is the technology underlying bitcoin, a digital currency that uses encryption techniques to generate new money and verify fund transfers, independent of a central bank. Two members of the U.S. Congress formed a caucus last month to advocate for cryptocurrencies and blockchain-based technologies, which may require