JPMorgan CEO Jamie Dimon had some harsh words for bitcoin this week.
He called it “a fraud” and said the cryptocurrency was “worse than tulip bulbs.”
Interestingly, Dimon admitted that the underlying blockchain technology has major potential to disrupt financial markets.
Back in 2014, Dimon said bitcoin developers “are going to try and eat our lunch.” Well aware of the disruptive technology, he noted, “That’s fine. That’s called competition, and we’ll be competing.”
Fast-forward to today… JPMorgan’s San Francisco office was having a meeting with leading blockchain companies on the same day Dimon made his remarks. Heeding his words from 2014, the megabank is also hiring tons of cryptocurrency developers and has an internal blockchain working group.
Still, his comments spooked crypto markets, which were already experiencing a correction. (A correction is an entirely natural and healthy thing after such a run.)
But his remarks didn’t concern me. I remember when Dimon said bitcoin “wouldn’t survive” at $400 in 2015.
It’s worth $3,400 two years later.
Dimon’s comments strengthened my bullish outlook on bitcoin and the overall cryptocurrency market.
His remarks reinforce my view that crypto is a serious threat to the financial establishment. The stakes are tremendously high.
So while most people are focusing on the fact that he called bitcoin “a fraud,” I’m more interested in what he said about government reaction to crypto back in 2015.
Here’s the juicy quote…
This is my personal opinion: There will be no real non-controlled currency in the world. There is no government that’s going to put up with it for long… there will be no currency that gets around government controls.
So the establishment believes they can squash it. Dimon is a powerful man. And there’s a chance he could be right.
But I’m betting he’s wrong. Squashing innovative technologies is no easy task. Squashing decentralized technologies that run on hundreds of thousands of computers all over the world is even harder.
It also occurs to me that government approval is near all-time lows. The country is divided, and nothing much (good) seems to get done in D.C.
What I’m saying is that I think they’re going to have a harder time controlling crypto than they expect.
The crypto community is well-funded, well-connected and motivated by more than just power.
The Right to Choose Our Own Currency
Should we have the right to choose the way we store value and transact financially?
Of course we should. There’s no reason any organization should have a monopoly on money.
Paper money not backed by anything has proved disastrous throughout history. It almost always ends badly, especially with sky-high debt levels. French philosopher Voltaire said it best: “Paper money eventually returns to its intrinsic value – zero.”
So when a brilliant alternative system like bitcoin, which has a hard cap of 21 million coins, comes along, that is no small thing.
It has the potential to upend the monetary order. Many people, myself included, think this would be a very positive development.
It’s not going to be easy, but it is possible.
We can start by contacting our elected representatives and letting them know that we believe cryptocurrency is an important innovation, that we’ll be watching cryptocurrency policy closely and that we hope they will not act to stifle innovation.
We all know some form of regulation is coming. We need to ensure it’s fair and does not encumber this nascent industry.
Jamie Dimon thinks governments can crush cryptocurrency. Let’s prove him wrong.
Co-Founder, Early Investing
P.S. We’re still in the early days of blockchain and cryptocurrency. So if you haven’t invested yet, don’t worry. Time is on your side.
To get started, check out our top four cryptocurrency picks and a complete guide to investing in this space through our First Stage Investor research service. See our new video about the service here.