Original question: Why does Jamie Dimon say “Bitcoin is a fraud,” and is he right?
Jamie Dimon said during a conference that Bitcoin was a fraud and he also added the following:
“It’s just not a real thing, eventually it will be closed,”
“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,”
About JP Morgan traders, he said he’d “fire in a second” any of them who were trading Bitcoin because:
“It’s against our rules and they are stupid.”
Well, Jamie Dimon went too far with his expression, but in fact, he plays his role very well. You see, Bitcoin is a decentralized digital currency – it has no authority besides its users per general. On the other hand, banks control financial flows and they don’t want to lose that position. Jamie Dimon is one of the CEOs who are realizing that bank monopoly might end and he is fighting his cause.
Brock Pierce, the famous US entrepreneur, has the same opinion. He said that Dimon:
“I think Jamie Dimon is doing exactly what Jamie Dimon is supposed to do. He is the CEO of one of the largest banks in the world…and this (blockchain and crypto) as an industry is a potential threat to his business…and as a fiduciary it’s his job to do what he is doing and I think he is doing a very good job of it.”
Now, is he right?
Right about what? Bitcoin being a fraud? Well, let’s check the dictionary:
Fraud – deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
So, if Bitcoin was a fraud, who gains the dishonest advantage? Who’s the victim? Are the investors victims because they make so many profits? Is there any authority that control Bitcoin system? Everyone knows Bitcoin is a blockchain-based cryptocurrency, which means it uses a distributed ledger, suggesting that there is no authority controlling it. Since there is no authority – who leads the fraud?
Well, in the end, the banks don’t benefit from Bitcoin’s huge popularity, and, as I said, Jamie is playing his role. So when you play your role, you don’t have to be right…because you play a role.
In short, of course he’s not right!
An auditing firm in the US, known as KPMG, said that Bitcoin and other cryptocurrencies are a real threat to retail banks. Their report says that:
These emerging forms of payments have “greater responsiveness to customer needs”, attracting “affluent, intelligent and profitable customers”
A report of the British Banking Association (BBA) says the same:
“Cryptocurrencies increasingly look like becoming ubiquitous challengers to more familiar, established currencies. And, as they grow in popularity, so too will the risks for banks.”
Now you know the reason.