Following bitcoin’s weekend selloff, Sebastian Siemiatkowski, co-founder and CEO of Swedish fintech giant Klarna, is doubling down on his concerns around an ongoing gold rush into digital currencies.
“There’s a lot of promise in cryptocurrencies,” Siemiatkowski said Tuesday on CNBC’s “Worldwide Exchange.” “But at the same time, I’m deeply worried that the big risk is like when my cab driver is asking me if he should invest in bitcoin. That’s when I get nervous that a lot of people will come late into the party and lose a lot of money.”
Siemiatkowski has previously said he’s “deeply worried” about posts promoting bitcoin on Twitter and thinks regulators should act to protect people from potential losses.
Bitcoin and other digital currencies have surged in price in 2021 on the back of increased interest from institutional investors, while major companies like Tesla and PayPal have also made significant moves in the space. Tesla bought $1.5 billion worth of bitcoin earlier this year and now accepts it as payment for its cars. Starting Tuesday, Paypal‘s Venmo will show users a new feature that lets them invest in four different cryptocurrencies — bitcoin, ether, litecoin and bitcoin cash — and share their purchases with friends through Venmo’s social feed.
The cab driver has become a talking about a bitcoin bubble — similar to the commonly told story of Joseph Kennedy Sr. becoming worried about the market before the 1929 crash after receiving stock tips from a worker shining his shoes. Some crypto bulls have pushed back against the idea, though.
In a series of tweets earlier this year, CoinShares chief strategy officer Meltem Demirors contended that “your cabbie buying bitcoin isn’t a sign of the top for the market.” It’s much easier to learn about investing now due to the internet, she wrote, because “high quality research is freely and readily available.”
While bitcoin bulls see it as a store of value akin to gold, like Siemiatkowski, not everyone is convinced by the digital currency’s boom — it previously sank as low as $3,122 in 2018 after climbing to almost $20,000 a year earlier. Skeptical economists view bitcoin as a bubble waiting to burst.
“As much as I’m excited about the technology, I’m always worried about talking about it because there is a big risk and such a volatile play at this point in time,” Siemiatkowski said. “You know, when I say what I just said, I promise you will have 500 people on Twitter chasing me for even daring to express skepticism.”
In February, CNBC reported that Siemiatkowski’s Klarna is close to finalizing a $1 billion funding round that would give the company, ranked No. 5 on last year’s CNBC Disruptor 50 list, a valuation of $31 billion.
Founded in 2005, Klarna is among many potential tech IPO candidates in Europe. “Maybe it could happen this year, maybe it would be next year, but it’s obviously going to happen fairly soon,” Siemiatkowski told CNBC earlier this year. “It’s definitely in the works but we haven’t officially started the process.”
Klarna’s CEO added that the firm finds direct listings — an alternative route to a traditional IPO where firms list without issuing any new shares — “interesting.”
—CNBC’s Kevin Stankiewicz contributed to this article.
