It should be obvious by now: JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon hates Bitcoin.
The leader of America's biggest bank - arguably the most influential person on Wall Street - has hurled insults at Bitcoin twice in the past month. Those comments have contributed to Bitcoin price volatility in recent weeks.
At a Sept. 12 investors' conference, Dimon called Bitcoin a "fraud." And he was just getting started...
"It's just not a real thing, eventually it will be closed," Dimon said, somehow oblivious to the fact that, as a decentralized network spread across the globe, Bitcoin cannot be "closed."
"It's worse than tulip bulbs. It won't end well. Someone is going to get killed," Dimon ranted. The reference to the Dutch Tulip Mania of the 1600s was his attempt to delegitimize Bitcoin's phenomenal price gains - 500% in the last 12 months - as a dangerous bubble.
For good measure, Dimon vowed to "fire in a second" any JPMorgan employee found to be investing in Bitcoin.
"It's against our rules, and they are stupid," he said. "And both are dangerous. The currency isn't going to work. You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart."
"As you would expect from a Wall Street bankster, Dimon has his own selfish interests at heart..."
Then, last week, Dimon went on the attack again in an interview with CNBC TV18 in India.
"It's creating something out of nothing that to me is worth nothing," he said of cryptocurrencies, deriding the asset class as a "novelty."
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Dimon then warned that governments would not allow Bitcoin and other cryptocurrencies to continue to grow and gain traction.
"The bigger they get, the more governments are going to close them down," he said.
As an organization that understands the potential of cryptocurrencies to reinvent the financial sector, we here at Money Morning couldn't disagree more with Dimon.
But the more interesting question is why someone in Dimon's position is bothering to go after Bitcoin at all.
As you would expect from a Wall Street bankster, Dimon has his own selfish interests at heart...
Why Jamie Dimon Keeps Attacking Bitcoin
In a nutshell, Jamie Dimon is terrified of Bitcoin and the entire cryptocurrency phenomenon.
He should be. Bitcoin was designed from the outset to be a system that would allow individuals to conduct transactions outside of the traditional banking system.
In short, Bitcoin is designed to make banks like JPMorgan Chase obsolete.
Just as scary to a banker like Dimon is that the Bitcoin network is controlled solely by code, not a central bank or government. And it's no accident that Bitcoin appeared in the wake of the 2008 financial crisis.
In public comments made shortly after he launched Bitcoin in 2009, creator Satoshi Nakamoto called out central banks for debasing fiat currencies and traditional banks for lending out money "in waves of credit bubbles with barely a fraction in reserve."
Related: What's the Best Cryptocurrency to Invest in Today?
Dimon has understood Bitcoin's potential to disrupt Wall Street at least since 2014, when it first became clear the digital currency was on his radar.
"When I go to Silicon Valley... they all want to eat our lunch. Every single one of them is going to try," Dimon told a gathering of JPMorgan investors in February 2014.
He repeated the sentiment in April 2015 in his annual letter to shareholders, this time mentioning Bitcoin by name. Dimon said "there is much for us to learn" from faster, cheaper, and more secure payment systems like Bitcoin.
Imagine Dimon's alarm this year as the price of Bitcoin soared from $968.23 to $5,000, while other cryptocurrencies, via a wave of initial coin offerings, sprang up like weeds in springtime.
Dimon is using his considerable clout to try to undermine cryptocurrencies before they get any more powerful.
And he's not the only Wall Street heavyweight speaking out against Bitcoin...
Wall Street Spreads Fear, Uncertainty and Doubt About Bitcoin
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Last week, Ray Dalio, founder of Bridgewater Associates - the world's biggest hedge fund - ripped into Bitcoin on the CNBC program "Squawk Box."
Not surprisingly, his thoughts echoed Dimon's.
"It's not an effective storehold of wealth because it has volatility to it, unlike gold," Dalio said. "Bitcoin is a highly speculative market. Bitcoin is a bubble."
Dalio also believes Bitcoin's lack of a "moat" is a critical flaw.
"There are other cryptocurrencies. So Bitcoin might lose competition to another cryptocurrency," Dalio said, failing to explain how Bitcoin has retained its dominant position despite the arrival of hundreds of new and improved cryptocurrencies.
John Hathaway, senior managing director for Tocqueville Asset Management, also weighed in last week.
Speaking to Kitco.com, Hathaway denounced cryptocurrencies as "garbage." He called the idea that Bitcoin had drawn capital away from the gold market "baloney." And like the other Wall Street moguls, he used the b-word.
"It's an absolute bubble - there's no question in my mind that it's in a bubble," Hathaway said.
And there was Mohamed El-Erian, who praised Bitcoin's technology but warned that it was overvalued.
"The current pricing assumes massive adoption," El-Erian told CNBC, "and I don't think governments will allow the amount of adoption that's currently priced in."
What part of "decentralized" don't they understand?
But if these Wall Street titans don't get Bitcoin, plenty of other notable investors do, particularly among venture capitalists.
Forward-looking venture capitalists like Marc Andreessen, Tim Draper, Barry Silbert, and Fred Wilson have sunk millions into Bitcoin, cryptocurrency, and fintech ventures over the past few years.
They believe, as do some noteworthy analysts, that Bitcoin and cryptocurrencies will increase in value exponentially as adoption increases. Some of the analysts have made Bitcoin price predictions of $55,000 by 2022, and even as high as $100,000 in 10 years.
Investors should not let naysayers like Jamie Dimon discourage them from putting a small portion (about 5% or so) of their holdings into Bitcoin and other top cryptocurrencies.
While investors should never risk on cryptocurrencies more than they can afford to lose, the potential for once-in-a-lifetime gains is worth that small bet.
Urgent: Executive Editor Bill Patalon just saw something on his precious metals charts he's only seen twice in 20 years. He calls it the "Halley's Comet of investing" - and it could lead to windfall profits. Read more...
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Related Articles:
- CNBC: JPMorgan CEO Jamie Dimon Says Bitcoin Is a "Fraud" That Will Eventually Blow Up
- CNBC: Ray Dalio, Founder of the World's Largest Hedge Fund, Says "Bitcoin Is a Bubble"
- Kitco.com: Stay Away from Bitcoin, It's an 'Absolute Bubble' Says Tocqueville's Hathaway
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.