A former derivatives trader at J.P. Morgan dissects CEO Jamie Dimon’s disparagement of bitcoin. From marcuss at valuewalk.com:
I spent nearly six years on the derivatives desk at JP Morgan here in Hong Kong. I held the CEO Jamie Dimon in extremely high regard, as I think did most other employees, and many others in the finance industry. He’s probably one of the most highly respected bank CEOs around.
But at a conference, yesterday, Jamie had some pretty strong opinions about bitcoin, saying:
“It’s a fraud”
“It’s just not a real thing, eventually it will be closed”
“It’s worse than tulip bulbs. It won’t end well”
“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”
None of this makes sense to me… I hardly even know where to start.
If you’re a murderer, then “you are better off doing it in bitcoin”?
Likewise, if you’re a drug dealer – then you should be using bitcoin?
His comments were absurd.
If bitcoin is the currency of corruption and crime… I have to wonder, when JP Morgan’s fellow global bank, HSBC, was fined US$1.9 billion for laundering money for Mexico’s Sinaloa Cartel and Colombia’s Norte del Valle cartel… how many bitcoin were involved? That would be… zero.
But less logical than all of that is Jamie’s suggestion that “eventually [bitcoin] will be closed”.
As it happens… Bitcoin can’t be “closed”. It’s not an overleveraged credit derivative fund. It’s a distributed blockchain running on a global network of computers.
As for “fraud” and “tulip bulbs”… it’s a statement from someone who would appear to know fraud well. The US$66 billion-dollar current value of bitcoin in circulation is only 5 times bigger than the US$13 billion then-record settlement that JP Morgan bank paid for its alleged role in underwriting fraudulent securities prior to the 2008 financial crisis. That should help put the numbers in perspective.
Just to clarify, bitcon is a terrible currency for crime.
To continue reading: Bitcoin Gets A Eulogy From Another Guru