Throughout JPMorgan’s revenues call Thursday morning, Jamie Dimon discuss bitcoin anymore.”Some attributed his newfound reticence to fear that cryptocurrencies will eventually make banks obsolete and relegate the Jamie Dimons of the world to obscurity, or perhaps jail. Others figured he was just ill of being asked pesky bitcoin questions when there are more pushing issues out there.Whatever his inspiration, it didn’t take wish for Jamie to break his word. Inquired about bitcoin at a conference Friday– less than 36 hours after his no-bitcoin promise– Jamie went all in. Here’s a taste: I don’t personally see any worth in something that has no real worth. You can all do whatever you desire, I do not care. I could care less what bitcoin trade for, how it trades, why it trades, who trades it. Ifyou’re silly sufficient to purchase it you will pay the price for it one day.I have also informed people that it can trade at$100,000 prior to it trades to absolutely no. Tulip bulbs traded for$75,000 when, or something like that. The only value of bitcoin is what the other person will spend for it. Honestly … a great deal of the purchasers are out there jazzing it up every day so that then you go buy it too. And take them out. I quite indicate that, by the method. People are excellent at manipulating journalism these days. Every day now you see on CNBC, continuously bitcoin. Who cares about bitcoin? I indicate, you know, the world economy is so big. J.P. Morgan alone, we [relocation] $6 trillion, all that cash, and bitcoin in total, all these currencies are$50 billion– maybe$ 1 billion in trades a day.Echoing his previous commentary on cryptos, Jamie included that federal governments will eventually crush bitcoin and that it is not at all like gold, apparently due to the fact that it hasn’t” been around a long period of time.
“Bitcoin likewise isn’t really a fiat currency, Jamie stated, which makes its uptake less most likely on a social scale( e.g., no one wants to be compensated in bitcoins if they need to pay taxes in dollars). As before, the only really novel part of Jamie’s bitcoin review concerns its practicality of a currency. In the abstract, there’s
absolutely nothing special about that point. On Friday early morning, for example, UBS launched a note whose conclusion was that bitcoin is a bubble, in part due to the fact that it doesn’t meet the two canonical requirements of a currency: that it be a store of value and a cash. Bitcoin is too unstable to be the former and too niche to the latter.This argument has been made before, and it’s not really Jamie’s point when he speaks about bitcoin as a bad currency. He’s not troubled by bitcoin in the abstract so
much as he is with its useful inability to make transactions inexpensively and reliably. That’s why Jamie always describes how numerous dollars JPMorgan moves every day, as he did again here: Who appreciates bitcoin? I suggest, you understand, the world economy is so big. J.P. Morgan alone, we [relocation]$6 trillion, all that cash, and bitcoin in overall, all these currencies are
$50 billion– possibly $1 billion in trades a day.Jamie’s crypto numbers are off here– bitcoin alone has a$ 92 billion market cap, and in the last 24 Hr $3.6 billion in bitcoin changed hands– but his point stands. As a member of the Federal Reserve authorized to make dollars and a custodian of$1.4 trillion in bank deposits, JPMorgan runs a significant piece of the monetary plumbing in the United States Jamie understands thoroughly just how much it costs to zip money around. He uses great deals of people particularly to minimize those costs.A crypto network looks a lot various from JPMorgan’s dollar factory. Part of bitcoin’s technical genius is the way it constructs that plumbing into the currency itself. A decentralized journal indicates every individual user becomes a node in the network, and no central counterparty is technically required.This is a cool achievement, but it’s also nightmarishly inefficient. Transaction times and processing charges have reached absurd levels as more people have actually bought bitcoin. See: Paying$15 to Send out $25 Has Bitcoin Users Rethinking Practicality. This is kind of banal and definitely less interesting that speaking about the threats fiat currency or the manifold evils wrought by mega banks. However if you’re going to contend with JPMorgan, you’re going to require performance. As it stands, one bitcoin deal takes countless times more energy than a charge card purchase– enough to power the average American household for more than 5 days. Which’s by design.This is why bitcoin as a currency strikes Jamie Dimon as flatly absurd. Whatever its theoretical merits, bitcoin is not developed to meet the demands of a contemporary currency. One might picture a blockchain-based application that could prove acceptable, however it would stop looking like bitcoin and begin looking more like what Jamie describes here: J.P. Morgan moves$6 trillion around the globe every
day. We do not do it in cash. We do it digitally. If we do it digitally through the blockchain, so be it. But it will be a dollar crypto currency.Anyway, Jamie ended his tirade by re-promising to avoid talking crypto from here on out, which means he needed to get in a dig he’s clearly been waiting to drop: However this is the last time I am ever going to respond to a question about bitcoin again. After I made that silly statement [about bitcoin], and got all over the front [pages] my child called me and said, “Father, I own two bitcoins.” My formerly clever daughter.Must be enjoyable to have Jamie Dimon for a dad. Why James Dimon and Larry Fink Aren’t Buying Bitcoin [WSJ].