Jamie Dimon, chief executive of JPMorgan Chase, doesn’t like Bitcoin and he doesn’t care who knows it. That makes it ironic that, of all the big players in finance, Dimon has probably done the most to keep Bitcoin in the headlines and stoke excitement in the currency among the investment community. Even as the finance community has generally got behind Bitcoin and the value has continued to skyrocket, Dimon has remained a holdout. Which has led many to ask, what makes him such a naysayer?
Dimon has been predicting the imminent demise of Bitcoin for at least two years, taking time out of his busy schedule to call the cryptocurrency “a massive Ponzi scheme” and “hugely overinflated”.
The Ponzi scheme comment is an interesting one, whilst Bitcoin is a new and untried form of investment and certainly carries new and unusual risks that you won’t encounter when investing in regular stocks and shares, it’s hard to see how it compares to the fraudulent schemes run by Bernie Madoff and others. It’s simply a new investment, just as Google and even the railways were back when they first debuted.
Has JPMorgan missed out?
In recent months, some have speculated that Dimon’s anger stems from the fact that he, and by extension, his company, have missed out on the huge growth of Bitcoin over the last 18-24 months. Even if the currency does eventually head for a correction, anyone who has been investing over the last 18 months will have multiplied their money by a factor of at least four. While the stock market has received praise for ‘record-breaking performance’, it has in fact only risen by about 30% over the same period.
Dimon and his investors would have been far better off putting their money into Bitcoin and a wider basket of cryptocurrencies and sitting back and waiting over this time period. The fact that they weren’t involved at all, at Dimon’s personal behest, may be causing some ruffles at board level.
Dimon has recently tried to reverse out of the dead-end situation he’s got himself into. While he still reserves fire and scorn for Bitcoin, he’s happy for JPMorgan to start investing in other cryptocurrencies. So far, he’s been unable to point to any overarching flaw that makes Bitcoin any different for them.
Unfortunately, it looks like that particular opinion runs too deep within Dimon for him to come up with a credible reason for changing his mind. Bitcoin continues to push new heights and it looks like JPMorgan may be regretting missing the train.