If you follow the cryptocurrency news space, or even the financial news space, you have sure been hearing about Jamie Dimon’s continuous public hatred spewed towards bitcoin, ethereum and cryptocurrency in general. Twice now in the past 2 weeks, Dimon has gotten on his loud speaker and publicly denounced bitcoin and cryptocurrency, labeling it as fraud and calling it no better than the tulip mania craze of the 17th century.
The market didn’t take his commentary lightly, and bitcoin and the entire cryptocurrency space sold off to the tune of 30%+ in just a few days. This isn’t the first time Dimon has voiced his displeasure with cryptocurrency either. He made similar comments back in early 2014 when bitcoin was trading for ~ $800 calling it a “terrible store of value”. Had you invested in bitcoin when Dimon initially made these comments, you would be up nearly 500% according to today’s price.
It makes complete sense for Mr. Dimon to bash cryptocurrency at every possible moment. It is a direct threat to his (meaning JP Morgan’s) business model and future sustainability. Banks thrive on earning interest by re-lending money you store in accounts with them, as well as charging fees for storing, transferring and having easy access to that capital. Cryptocurrency has the potential to severely disrupt that very business model, and it is terrifying Mr. Dimon and banking CEOs alike.
Who needs a bank account, and fees associated with a bank account when I can simply have my own crypto wallet stored on a usb key?
Why as a business, am I allowing Visa, Mastercard, PayPal, etc to take 3% of my hard earned revenue just for processing transactions from my clients electronically?
How come when I travel to other countries, I have to pay exchange rates to convert my currency into their currency?
Businesses worldwide are already starting to accept bitcoin, even large companies such as Newegg are joining suit. Small mom and pop places too! I was recently in Koh Samui, Thailand, and a coffee shop on this small island even proudly displayed an OCR code with verbiage indicating they accepted bitcoin for payment.
This movement directly impacts JP Morgan, Visa, American Express, et. al. bottom line. And Mr. Dimon isn’t pleased about it. Eventually consumers and businesses may not even need banks altogether for payment or processing, and this is what keeps Mr. Dimon up at night, and ultimately fuels his continued bashing of cryptocurrency.
What’s interesting, is that through all of this negative banter, JP Morgan is actually working on it’s own “enterprise” version of ethereum called “quantum”.
So it makes total sense for Jamie Dimon to bash cryptocurrency at every given opportunity. Mr. Dimon is a very smart man, and like us, we believe he truly does see cryptocurrency as a game changing disrupter of the banking industry, and that’s why we are seeing continued bashing from him. He wants to move to bank directed enterprise level blockchain transactions (quantum), so that the banks still can keep their piece of the pie and be relevant.
We are in the infancy stages of a paradigm shift in the way currency, banking and other financial contracts are transacted, and Mr. Dimon can see the light.