Prominent crypto-industry stakeholders slammed JP Morgan Chairman and CEO Jamie Dimon, an avowed Bitcoin skeptic, and accused him of failing to understand the world’s No. 1 cryptocurrency after Dimon said, “I personally think Bitcoin is worthless”.
Bitcoin was trading at $56,999 as of this writing with a market capitalization of $1,074 trillion.
Dimon made the comment during the Institute of International Finance (IFF) annual membership meeting, which has been held virtually, according to Bloomberg. He acknowledged that JP Morgan clients disagree with him, and the bank will cater to those who wish to buy and sell Bitcoin.
“I don’t want to be exposed to it but I don’t care, it makes no difference to me,” Dimon said in a video clip shared by Bloomberg on Twitter. “I don’t think you should smoke cigarettes either. Our clients are adults. They disagree. That’s what makes more markets. So if they want to have access to buy or sell Bitcoin, we can’t custody it, but we can give them legitimate, as clean as possible access.”
Speaking at the IFF event Monday, Dimon questioned Bitcoin’s 21 million supply cap. That’s what caused the biggest uproar, Decrypt reported.
When the world’s first cryptocurrency was created, it was given a 21 million cap, meaning there will only ever be 21 million coins in existence. That limited supply is seen as an advantage compared to fiat currencies because it creates scarcity, theoretically ensuring that its value holds steady over the years. That’s why Bitcoin fans often refer to it as “digital gold” and an investment in a store of value.
“How do you know it ends at 21 million?” Dimon asked. “You all read the algorithms? You guys all believe that? I don’t know, I’ve always been a skeptic of stuff like that.”
Brian Armstrong, CEO of crypto exchange Coinbase, tweeted in response, “Yes, I read it. And then I wrote it (coding up our own Bitcoin node) to make sure I understood it.” He added that Dimon’s lack of engineering background would be a problem for a CEO in the future. “CEOs without a science/engineering background are going to be at a disadvantage in the coming decades” because “software is eating the world, changing every industry … Luckily, the tools to learn it are available online for free, and are getting better and better. It’s accessible to almost anyone, if they are willing to power through it, and at least learn the basics.”
Michael Saylor, the CEO of MicroStrategy and holder of more than $2.24 billion worth of Bitcoin, also weighed in on Dimon’s comments, tweeting that it was critical for bankers and investors to understand crypto.
“So strange. For a man who has done a brilliant job running a giant bank, his answers around [Bitcoin] are sophomoric and he keeps doubling down on them. I pray I stay open minded my whole life.”
Dimon hasn’t wavered in his anti-crypto stance, CNBC reported. “I’ve always believed it’ll be made illegal someplace, like China made it illegal, so I think it’s a little bit of fool’s gold,” he told Axios CEO Jim VandeHei. He also said that he thinks “regulators are going to regulate the hell out of it.”
Federal Reserve Chairman Jerome Powell said in a Congressional hearing on Sept. 30 that the central bank had “no intention” of banning cryptocurrencies. This was credited as one reason for Bitcoin’s sudden Oct. 1 gain.
In August, Securities and Exchange Commission Chairman Gary Gensler likened crypto markets to the Wild West, saying they mostly operate outside of regulations that seek to protect investors and consumers. The asset class is plagued by “fraud, scams and abuse” and must be policed, he said. “We have taken and will continue to take our authorities as far as they go,” Gensler said.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?