How Are Business Schools Responding to the Bitcoin Hype?

In 2017, the price of Bitcoin climbed sharply into the thousands, garnering attention of the media and more importantly those looking for the next big thing in investing. Bitcoin initially exceeded expectations for some doubters. At the time of publishing this article, one Bitcoin was worth $15,784.84. As CNN Tech explains, “The hype is about getting rich by trading it.”

Bitcoin is an online currency that was developed in 2009. Someone using the alias Satoshi Nakamoto invented it, but has remained elusive despite journalists and others trying to track him – or her – down. This money remains somewhat of a mystery to those living in the mainstream.

It appears to have come out of thin air. No government or bank handles transactions, or oversees regulation of the currency, at least for now. This allows for anonymity.

Blockchain is the technology supporting Bitcoin. It is a digital ledger of economic transactions. But it has the potential to be used for anything of value, according to experts, including on the Blockgeeks website.

While you can use Bitcoin and other cryptocurrency to pay for products on an increasing number of websites, and even in the real world on occasion, that’s not why people, particularly graduate business students, are so interested in it. It is the investment opportunity that is the main appeal to many.

Christian Catalini, founder of the MIT Cryptoeconomics Lab at MIT Sloan School of Management, has been at the frontier of academic research of Bitcoin and blockchain. In 2013, he began studying the currency.

In those early days, he and his colleague Catherine E. Tucker actually gave students some Bitcoin as part of their research efforts. Students who hung onto that money should have about $5,000 today, says Catalini, who is also the Theodore T. Miller Career Development Professor at MIT.

The school is responding to ever-increasing interest on the part of students, adds Catalini. Sloan has been offering a three-day intensive class on cryptocurrency since 2014. Offered two times per year to those in the business school, across a number of different programs, the class had to be capped at 100 the last time Catalini taught it. Sloan is developing an online course as well as a longer on-campus course about cryptocurrency.

What is appealing – besides the excitement of a new currency and the possibility of striking gold – is the intersection of many disciplines. Catalini says students in other parts of campus, such as computer science, are equally curious about Bitcoin and blockchain. In addition, many in the MIT Entrepreneurship Lab, says Catalini, are pursuing blockchain.

Sloan students aren’t the only ones swooning about this rapidly evolving sector. The University of Pennsylvania’s Blockchain Club has more than 300 members, including many students from The Wharton School.

In 2018, the club is organizing an event to allow students to network with “a who’s who of the blockchain ecosystem,” says Wharton spokesperson Michele Besso. Also, the Wharton FinTech Club has hundreds of members. It provides access to speaker series, field trips, hands-on projects, and panel discussions about the latest trends in the industry.

Just like Sloan, Wharton will soon be offering a course. Kevin Werbach, associate professor of Legal Studies and Business Ethics at Wharton, is developing the class. He is also writing a book on blockchain for MIT Press.

At Harvard Business School, students can sign up for the Blockchain, Bitcoin, and Cryptocurrency Club. It had nearly 800 requests for information about the club in 2017, compared to 30 or so in the previous year, according to a recent CNBC story. In line with this interest, Harvard Business Review has extensively covered the rise in Bitcoin over the last year.

Indeed, CNBC also reports Kathryn Haun, a former federal prosecutor who focused on digital currencies and fraud, will teach the first blockchain course at Stanford Graduate School of Business in spring 2018. Again, this was a response to student demand brought to the attention of administrators.

While employers are reportedly more interested in new hires with blockchain skills, many businesspeople remain skeptical. Many well-known titans of business have openly expressed their belief that the currency is risky and the Bitcoin bubble will soon burst.

"I could care less what Bitcoin trades for, how it trades, why it trades, who trades it," JP Morgan CEO Jamie Dimon famously said at a conference in October 2017. "If you're stupid enough to buy it, you'll pay the price for it one day."

Less than two months later, however, business reporters began sharing news that JP Morgan was looking into client demand and potential risks of facilitating trades in CME Group Inc.’s planned Bitcoin futures contracts, according to Bloomberg.

Like much in the digital world, cryptocurrency is proving the older generation is more cautious and reluctant about diving in. In the end, though, they almost always have no choice but to come around to the idea. Millennials, who make up most of the graduate business school population, are already on board.

“Students are less worried about those concerns,” says Catalini. “They’re born digital, so this is natural to them.”

Even though Catalini admits academics such as him are uncomfortable making predictions, he believes Bitcoin has “first-mover advantage” in the industry. This, he says, could help it survive any shake up should the bubble burst. But he admits that people could improve on the technology, and it might not end up exactly the same as it is now.

Catalini reminds observers of the industry that a bursting bubble isn’t always a bad thing either. After all, he says, when the dot-com bubble burst, the world was left with the likes of Amazon and Facebook.

Regardless, Catalini tells his students to wade into the cryptocurrency pool carefully. “People should not invest in any money today,” he adds, “that they can’t afford to lose tomorrow.”