Business Essentials for Professionals


Jamie Dimon Of JP Morgan Warns Bitcoin And Cryptocurrencies Will Be Closed Down By Government If They Get Too Big

Jamie Dimon Of JP Morgan Warns Bitcoin And Cryptocurrencies Will Be Closed Down By Government If They Get Too Big
Warning that governments will shut them down if they grow too large, JP Morgan Chase Chief Executive Jamie Dimon has laid into bitcoin and digital currencies once again.
"Right now these crypto things are kind of a novelty. People think they're kind of neat. But the bigger they get, the more governments are going to close them down," Dimon said during  a television interview.
Dimon was concerned that with bitcoin, ethereum and various initial coin offerings (ICOs), there are now cryptocurrencies everywhere.
"It's creating something out of nothing that to me is worth nothing," he said. "It will end badly."
Digital currencies would ultimately be forced to into becoming a black market as governments will attempt to control it by threatening anyone who buys or sells bitcoin with imprisonment, and will eventually crack down on cryptocurrencies, Dimon warned.
These are the latest comments from Dimon attacking bitcoin. He called cryptocurrency a “fraud” earlier this month. There has been a sharp sell-off in bitcoin and his comments, along with several prominent hedge fund investors, came before that sell-off. In the days after his comments, the price for one bitcoin fell from around $4,340 to as low as $2,981.05.
According to CoinDesk data, bitcoin has since recovered to around $3,640.68. Bitcoin's value has risen 264 percent this year despite this volatility.
Several bitcoin investors and experts criticized Dimon's comments. 
"Comments like Jamie's show a failure to grasp the significance of the blockchain and the power of brand in a fundamental sea of change," said Scott Nelson, chairman and CEO of blockchain firm Sweetbridge, said.
Meanwhile, a market abuse complaint in Sweden against Dimon and JPMorgan has been filed by a company called Blockswater. According to a report by City A.M, Dimon deliberately spread false and misleading information, claimed Blockswater. The reports said that JPMorgan Chase declined to comment.
Dimon also criticized bitcoin for not being a fiat currency formed by a government and backed by a central bank during the interview on Friday.
"With central banks, (the money) says legal tender: you have to take this as payment. It's very cheap to do, it's very easy to move back and forth. JPMorgan moves $6 trillion around the world every day very efficiently, very quietly, very effectively and very cost efficient," he said.
"Creating money out of thin air without government backing is very different from money with government backing."
However, Dimon did praise the technology underpinning bitcoin – the blockchain.
"Blockchain is a technology that can be used for multiple things, including cryptocurrency. It could be used for digital dollars, and there are digital dollars already; a lot of the dollars held in our bank are digital," he said.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc