This is a question that has plagued critics for centuries. Shylock is a character that it is possible to examine in a number of different ways. Firstly, and perhaps most evidently, he is clearly presented as the villain of the play. It is he who makes the "merry bond" for a pound of Antonio's flesh, and it is he who unswervingly pursues the redemption of his bond. He clearly states his hatred of Antonio and does everything he can to kill him and gain revenge against him. Even when alternatives are offered, and in the court scene in Act IV scene 1 he is advised by Portia to show mercy, he only repeats the one phrase again and again: "I shall have my bond." He is clearly a very difficult character, having driven his daughter to elope with a Christian because of his miserly ways. This line of attack demonstrates that he is a villain.
However, it is also important to remember the way in which he could be interpreted as a victim. In Act I scene 3 for example, he describes the treatment he has received from Antonio:
You call me misbeliever, cut-throat dog,
And spet upon my Jewish gaberdine,
And all for use of that which is mine own.
This highlights the significant persecution which both Shylock and his race faced at the time of writing the play. Shylock is therefore a man who lives as a persecuted minority. He sees his one and only loved daughter run away from under his gaze, and steal all his wealth, and then go on to squander it. In addition, as demonstrated by his famous "Hath not a Jew eyes?" speech, he is treated inhumanely by the majority Christian population of Venice, the same population that then goes to him in order to take out a loan. Lastly, when he is defeated at court by Portia's skill, he is forced to abandon the one thing that above all else is of most value and significance to him: his religion. It is therefore equally possible to view him as a victim.