Jamie Dimon, CEO of investment bank JP Morgan, seemed to be enjoying himself when he addressed the Delivering Alpha conference in New York last week. He had Bitcoin in his sights and it would seem that he isn’t the cryptocurrency’s biggest fan.
Without mincing his words, Dimon likened Bitcoin to ‘tulip bulbs' and intimated that he considered it suitable for use only by drug dealers, murderers and North Koreans. For good measure he was also at pains to point out that any JP Morgan employees found to be trading in bitcoins could expect to be unceremoniously shown the door.
Dimon’s objections to Bitcoin – and by extension one imagines cryptocurrencies in general – are in some ways unsurprising. As a senior banker, he is almost bound to harbour suspicions to these new kids on the block, what with their lack of any government’s backing and wholly decentralized structuring. Powerful people do generally tend to react very badly to things they can’t control.
Ironically enough, JP Morgan itself played a significant role in the 2008 financial crash – an event that is largely seen as one of the precipitating factors in the emergence of Bitcoin and others like it. No wonder perhaps that he wishes that they would just go away.
It would be wrong to suggest that Bitcoin’s massive current valuation does not carry some note of caution – what goes up does invariably tend to come down eventually. At the time of writing it is hovering around the $4,000 mark, down from nearly $5,000 a few weeks ago; not exactly holding steady. Yet Dimon himself seemed to be hedging his bets when he speculated that it could go as high as $20,000 before the bubble eventually burst.
Times aren’t too easy for Bitcoin at the moment, with China shutting down its exchanges, following an earlier ban on ICOs. But those like Dimon who are already heralding its downfall are jumping the gun. Bitcoin and the blockchain technology that underpins it are changing the financial landscape beyond recognition and to write either off at this stage would be highly premature.
Dimon’s comments certainly precipitated a drop in the price of Bitcoin and Ethereum, the other big player in the cryptocurrency sphere, and one imagines that he and his colleagues in the banking industry will jump on this as proof enough of his sagacity.
There’s a final irony to be observed here – despite Dimon's comments, it would appear that JP Morgan is getting in on the Bitcoin frenzy itself. Perhaps the next item in the CEO’s in-tray will be a raft of sudden redundancies.
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