Bitcoin is a scam and it’s only useful for drug dealers, murderers, and North Korea. That’s the opinion of Jamie Dimon, the billionaire CEO of America’s biggest bank JPMorgan Chase, who said he’d fire any employee he caught trading the cryptocurrency.
Dimon’s thrashing of bitcoin sent its price plummeting Wednesday, but despite the very public criticism of the world’s most valuable cryptocurrency, Dimon and JPMorgan continue to be a leader in the financial world in implementing new technologies based on the blockchain, the distributed ledger technology that underpins bitcoin.
As one of Wall Street’s most high-profile figures, Dimon knew his comments would have an impact. A day after he made the remarks, the price of bitcoin has dropped from $4,250 to $3,790, dipping below the $4,000 mark for the first time in over a month. Bitcoin’s value has soared in 2017, from less than $1,000 at the turn of the year.
“It’s just not a real thing; eventually it will be closed,” Dimon said at the Delivering Alpha conference in New York on Tuesday. “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed. Currencies have legal support. It will blow up.”
Dimon was referencing a period in the 17th century when demand for tulip bulbs inflated the price massively before it crashed just as quickly, leaving many people in financial ruin. Many others have made this comparison.
Dimon said he would fire any JPMorgan trader caught trading bitcoin as it was against company rules and would prove they are “stupid.” But Dimon didn’t completely dismiss bitcoin’s value, describing a number of scenarios where he felt it was a better option than fiat currency.
“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,” he said. “So there may be a market for that, but it would be a limited market.”
Dimon’s lack of belief in bitcoin goes against a growing consensus on Wall Street, where it and other cryptocurrencies are being embraced. But his opinion should come as no surprise, given that back in 2015, when the price of bitcoin was just a fraction of what it is today, Dimon said “there is no government that’s going to put up with it for long” as it is designed to evade government control.
For all the attention his comments have garnered, it should be remembered that Dimon and JPMorgan Chase are seen as leaders when it comes to developing real-world applications for the blockchain technology that underpins bitcoin.
Using the ethereum platform — a rival to bitcoin’s blockchain — JPMorgan has developed Quorum, an enterprise-grade distributed ledger and smart contract platform, designed specifically to let large financial institutions comply with regulatory requirements.
Incidentally, the price of ethereum has also suffered in the last 24 hours, losing 10 percent of its value in the wake of Dimon’s comments.