Tuesday, January 9, 2018

On Jamie Dimon's Retraction of His Claim That Bitcoin is a Fraud

In September, J.P. Morgan Chase Chairman and CEO Jamie Dimon called bitcoin a fraud. "I regret making" that comment, he said Tuesday on Fox Business.

"The blockchain is real," Dimon added in the interview. "You can have cryptodollars in yen and stuff like that. ICOs ... you got to look at every one individually. The bitcoin was always to me what the governments are going to feel about bitcoin when it gets really big. And I just have a different opinion than other people."

Since his comment, I have been flooded by bitcoin fanboys with emails pointing out what he said.

The fact of the matter is that Dimon is moving closer in line with my perspective on bitcoin.

I have never called it a fraud or a Ponzi scheme. Though, it does seem to have elements of a pump and dump scam.

That said, I have consistently pointed to four pillars that could cause problems for bitcoins or the bitcoin price:

1. Transaction processing difficulties

2. Government interference

3. A recession

4. Simply a natural exhaustion of buyers
I believe we have possibly hit bitcoin exhaustion, if it doesn't break above its old high of $20,000 plus, soon, the game is over.

Dimon now appears to recognize problem 2. "government interference" when he says:
The bitcoin was always to me what the governments are going to feel about bitcoin when it gets really big.
If bitcoin does ever start to become a serious method of exchange, government is going to shut it down. This is not complicated. Dimon is correct here. No mumbo jumbo about platforms on top of bitcoin is going to change my view on this.  At the government stage, it is not about the technology. It is about government going to Macy's, Marriott hotels etc. telling all vendors in the country not to accept bitcoin. They are not going to risk their businesses to play the bitcoin party game.


1 comment:

  1. The market is just extremely overvalued, you are correct about that. Some of the tokens are being used as distributed ledgers and for quicker, more efficient exchange. The problem is there is no coin that has a mass adoption yet. I tend to agree with something I read the other day that this market was a once in a lifetime opportunity for non-bankers and brokers to actually make huge gains in a market. No way they were going to let that continue un abated. My gut is telling me that the opportunity has for the most part faded. That's good, the crypto market needs a major correction to eliminate all the junk, start letting the cream rise to the top.