Jamie Dimon, the chief executive of investment bank JP Morgan Chase, is a big fan of the blockchain – his bank is even investing in the technology, with the hope that it could save money on trading costs in the long run. However, he is definitely not a fan of bitcoin, the digital currency powered by blockchain. Indeed, he says that if he finds any of his traders betting on bitcoin, he will “fire them… For two reasons: it’s against our rules, and they’re stupid.”
Dimon admits that those who have invested in it so far have been very successful – even his daughter “has made a lot of money investing in it, and now she thinks that she’s some sort of genius”. He’s also not suggesting that you follow people like Jim Chanos, a famed short seller and investment manager, who has actively shorted it. He does think however that bitcoin, and similar cryptocurrencies, have become so overvalued that the mania can be compared to the “tulip fever of the 17th century”.
Sure, he says, “you might be better off using bitcoin if you live in countries like Venezuela, North Korea or Ecuador”, but this isn’t the case in stable countries such as the US “where its only use is for speculation”. Also, since “having a national currency is one of the basic roles of a government”, countries around the world will fight hard against any perceived competition. Indeed, China has recently introduced new measures to restrict the use of cryptocurrencies. Expect to see more of this: “just you wait until someone gets hurt, or it is used for illegal purposes, they’ll start really cracking down on it”. Eventually, bitcoin will be “the emperor without clothes”.