The Bitcoin community is reacting with predictable outrage to comments slamming the currency from JPMorgan Chase & Co. CEO Jamie Dimon. These included a threat to “fire in a second” any JPMorgan trader found trading bitcoin. Let’s face it though, Dimon’s been saying this for years — and Bitcoin has only grown.
Bitcoin ‘Stupid’ and ‘Dangerous’ Says Dimon
“I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous,” Dimon said at the Delivering Alpha investment conference. He also called Bitcoin “a fraud”.
Bloomberg reported that “Bitcoin slipped after Dimon’s remarks”, though it’s not certain the two incidents are linked. Bitcoin has been volatile the last two weeks over another round of Chinese “will they won’t they” rumors about restricting bitcoin exchanges.
No-one should be surprised by Dimon’s latest comments — he’s just rehashing the same criticisms he’s been making for years. In January 2014 he said it would “eventually end”, was being used for illicit purposes, didn’t have government backing, and “could be replicated over and over”.
Sound familiar? At least by 2017 someone may have educated him on the last talking point; he didn’t repeat that one.
He continued in November 2015. Bitcoin and virtual currencies “are going to be stopped”. By 2015, though, he was warming to blockchain, the oft-touted “technology underlying Bitcoin”. JPMorgan had a study group examining blockchain and would use it if it proved cheaper and more efficient.
Sure the Value’s Increasing, but It’s a Craze
Dimon did acknowledge bitcoin’s soaring price over the past few years, but said this didn’t guarantee its long-term success. “This is not advice of what to do. My daughter bought bitcoin, it went up and now she thinks she’s a genius,” he added.
He hauled out what may be Bitcoin criticism’s oldest trope: the 17th century Dutch tulip craze. Actually, he said it was worse.
The tulip comparison is such a cliche it’s hardly worth rebutting. Some Bitcoiners have even turned it into a joke. However the key difference is tulip bulbs were never intended to be a currency revolution, aiming to replace the central and corporate banks people like Dimon represent.
Also, visitors to the Netherlands countryside will tell you tulips are still fairly prominent 400 years later.
Expect Pushback From Established Interests
Note that whenever Dimon criticizes Bitcoin, he tends to repeat the same points. Whether self-appointed or otherwise, he’s the banking industry’s main face of cryptocurrency opposition. Bitcoiners will argue against them, only to see him pop up and repeat them again in a year’s time.
In many ways he’s reminiscent of Jack Valenti, the late president of the Motion Picture Association of America (MPAA). An industry icon, he railed for decades about perceived threats. Valenti told Congress VCRs were like “the Boston Strangler” to movie producers, and cable TV companies were “huge parasites”.
He tried to ban studios from sending “screener” copies of movies to reviewers and awards voters, for fear of copyright infringement. And he was livid about almost anything to do with online movie distribution.
Bitcoin Is Actually an Alternative to Big Banks
All that, and the technology Valenti hated wasn’t seeking to replace his industry — only complement it. From its very beginning, though, Bitcoin has been critical of the financial industry. Its Genesis Block includes an embedded reference to bank bailouts. Corporate banking has been a decades-long cesspit of moral hazard, collusion and lost value.
So it’s no surprise people like Jamie Dimon hate Bitcoin, and will use their platforms to denounce it. In fact, if they didn’t criticize, there’d be more cause for concern. It’s a challenge to their established interests, interests that give them billions of dollars in wealth, power and influence. Why would they support that?
Maybe he’ll scare off a few traditional investors. But like the entertainment industry’s glacial acceptance of the digital age, they’ll probably come around eventually. All Bitcoin has to do is keep doing what it does — offering an alternate global financial system.
What did you think of Dimon’s comments? Let’s hear your thoughts.