Jamie Dimon, CEO of JPMorgan, has been in the news a lot lately expressing his critique on the Bitcoin cryptocurrency. In an interview he said Bitcoin is “a fraud” that will eventually blow up. He continued by saying it’s not a real thing and that eventually will be “closed”. (English, 2017) By closed he believes governments will crush the coin down one day. Besides that, he said: “if you are stupid enough to buy it, you’ll pay the price for it one day… The only value Bitcoin has is what the other guy will pay for it” Cheng and Tausche, 2017). He finished off by saying he would not hesitate to fire any JPMorgan trader who is caught trading in Bitcoin. (Son, Levitt and Louis, 2017)
How much truth is there in the statements of Jamie Dimon? While I do agree there is a lot of hype behind cryptocurrencies lately, I do not agree with his comment that Bitcoin will eventually be shut down. I believe the only possible threat for Bitcoin would be an attack on the Bitcoin network, which is still highly unlikely to stop the currency. Bitcoin is a network run on thousands of nodes geographically dispersed all over the world and thus different country’s legal jurisdictions apply to the currency. For governments to stop this would require all the governments to come together and agree to shut it down, which is something that has not happened often if you take a brief look at history. If people lose interest in the currency or the currency fails to achieve mass scale adoption, the price would of course drastically reduce. This will not stop the currency from existing however.
On a more positive note, he did however state that blockchain, the underlying technology of Bitcoin and other cryptocurrencies, is actually a good technology. In his words: “God bless the blockchain”. JPMorgan actually created its own cryptocurrency product called Qourom and was a founding member of another cryptocurrency initiative called the Enterprise Ethereum Alliance.
What do you make out of Jamie Dimon’s comments about Bitcoin? Do you think he has a valid point or does this show his knowledge of Bitcoin is limited?
English, C. (2017). Jamie Dimon is back to trashing bitcoin. [online] New York Post. Available at: http://nypost.com/2017/10/13/jamie-dimon-is-back-to-trashing-bitcoin/ [Accessed 18 Oct. 2017].
Cheng, E. and Tausche, K. (2017). Jamie Dimon says if you’re ‘stupid’ enough to buy bitcoin, you’ll pay the price one day. [online] CNBC. Available at: https://www.cnbc.com/2017/10/13/jamie-dimon-says-people-who-buy-bitcoin-are-stupid.html [Accessed 18 Oct. 2017].
Son, M., Levitt, M. and Louis, M. (2017). Jamie Dimon Slams Bitcoin as a ‘Fraud’. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin [Accessed 18 Oct. 2017].
