Jamie Dimon, JP Morgan’s CEO and one of the most prominent bank chiefs on the planet, believes bitcoin is doomed. At a gathering of investors hosted by Barclays in New York, Dimon referred to bitcoin as a “fraud” and told a group of professional investors what would happen to JP Morgan traders taking bitcoin action: “I’d fire them in a second. For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”
This statement is in stark contrast to a tsunami of interest by traditional financial institutions, such as Goldman Sachs, in the cryptospace this year. Even cybersecurity professionals like John McAfee, who is not a financial expert but knows a thing or two about computers and technology, are becoming true believers. Moreover, the blockchain that powers bitcoin is predictable and has been running since 2009. Known issues with the cryptocurrency were addressed in the SegWit fork which created two versions of the coin. This isn’t the sign of a dying currency. This is a sign that this ecosystem is self-regulating, solves its own problems, and is growing.
Reportedly, Dimon further told the conference of investors that bitcoin “won’t end well,” that it’s “worse than tulip bulbs,” and that “someone’s going to get killed.” This is rather strong language coming from a man whose company was integral in forming a cryptocurrency business consortium. So what do Dimon’s comments mean? Is he saying that it’s easier conduct illicit activity with cryptocurrency than cash? Is this just a case of a banker appeasing his buddies during a high powered lunch, or was Dimon actually trying to caution investors against cryptocurrencies?
Jamie Dimon doesn’t make money off of bitcoin. The majority of investors Dimon was addressing likely don’t either. They make their money off of fiat, so Dimon’s remarks could just be posturing in front of his contemporaries. Phrases like, “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” expose his naiveté. Places like Venezuela use cryptocurrencies not because they are criminals, but because their fiat currencies have failed them alongside their governments. So in turn, those people adopt crypto because it is stable and reliable. If sanctions are placed on your country, again, cryptocurrencies are a viable alternative and don’t care if you are good or evil. People care about politics and the differences between us. Crypto’s don’t.
Bloomberg reports that Dimon further differentiated between bitcoin and blockchain technology, saying that blockchain could be useful. This is comforting to hear from Dimon, considering his company has actually developed its own blockchain. In fact, JP Morgan’s blockchain lead had her own amusing reaction to the inflammatory statements:
Upon greater reflection, Dimon may realize that blockchain technology could not exist without cryptocurrencies like bitcoin or Ether. Cryptocurrencies like bitcoin are actually some of the best performing currencies ever. So why does Dimon despise them?
Simple. Dimon told the gathering of investors “someone’s going to get killed and then the government’s going to come down. You just saw in China, governments like to control their money supply.”
Maybe what Jamie Dimon is hoping for is that the government will come down on cryptocurrencies and save him – just like they did in 2008 when his company took $12billion in US taxpayer bailout money.
If bitcoin fails, how much will we have to pay?