Jamie Dimon, the Chairman, President and CEO of JP Morgan, took a few shots at Bitcoin, while addressing a conference in New York. He was “talking his book” as they say, extolling the virtues of Wall St banking and dissing the rising competition. Make no mistake, Bitcoin and its fellow mutant currencies are the coming competition for the banking world.
Dimon claimed that he would fire “in a second” anyone at the investment bank found to be trading in bitcoin.
And, in explanation: “For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”
Expressing deep skepticism, he propounded: ‘You can’t have a business where people are going to invent a currency out of thin air. It won’t end well…someone is going to get killed and then the government is going to come down on it’ (without exactly explaining how such an invention would lead to someone’s demise).
Rationalizing, he added: “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 US dollars. So there may be a market for that, but it would be a limited market.”
Drawing an historical parallel, he noted: “It is worse than tulip bulbs.”
And in case you are tempted to invest in the upstart coin, he dispensed some trading advice: “Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up,” he said. “Honestly, I am just shocked that anyone can’t see it for what it is.”
The Empire Strikes Back
The response from the Cryptorati on Twitter was instant and a little brutal. For example, one tweeted:
“Jamie Dimon just called Bitcoin a fraud, hmm… it’s almost as if Bitcoin made predatory home loans then got a bailout and never went to jail.”
One noted that Dimon’s comment sound spookily similar to the Blockbuster chain’s response to Netflix:
“Don’t worry. It won’t last… it’s no threat to us.”
Another noted Microsoft CEO, Steve Ballmer’s laughing reaction to the iPhone, calling it a “not very good email machine” and criticizing it for having no keyboard. (The iPhone eventually distinguished itself by pulling in more annual revenue than the whole of Microsoft.)
Dimon’s diatribe was, by the way, precisely the 160th time that Bitcoin has been declared dead or doomed. You can view a complete list of these popular profound proclamations here:
The numerous attempts to bury Bitcoin with words is the reason why the Bitcoin devotees refer to Bitcoin as the Honeybadger. (If you’re not sure of the nature of the Honeybadger watch this viral video that describes its character – or watch it fight with a few lions. Honeybadger don’t care.)
It is beginning to sound like the major banks are running scared. Bitcoin and the other creatures from the cryptoswamp are a very genuine threat to them and, thus far, they have found no way to combat it. The imp is out of the bottle.
As for Bitcoin being a bubble of the tulip variety, it is nowhere close to that right now. The dot com bubble stripped the NASDAQ of about 80% of its peak value, amounting to a $5 trillion collapse. Bitcoin has never been worth more than $80 billion in market cap and the whole of the crypto market has never grown beyond $175 billion. The market cap is not even a quarter the size of Apple’s. Right now, a crypto-collapse would ruffle relatively few financial feathers.