This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bitcoin Is An Arrow Aimed at Jamie Dimon's Heart

NEW YORK (TheStreet) --JPMorgan Chase (JPM - Get Report) Chairman and Jamie Dimon said Thursday he doesn't like Bitcoin, but this shouldn't surprise us.

Whatever you think of Bitcoin -- and I'm not sure I understand it myself -- there can be little doubt that it is a threat to Dimon.

In an essay published Monday by The New York Times, venture capitalist Marc Andreessen cited his partner Chris Dixon in explaining the potential attractiveness of Bitcoin to merchants.

Let's say you sell electronics online. Profit margins in those businesses are usually under 5 percent, which means conventional 2.5 percent payment fees consume half the margin. That's money that could be reinvested in the business, passed back to consumers or taxed by the government. Of all of those choices, handing 2.5 percent to banks to move bits around the Internet is the worst possible choice. Another challenge merchants have with payments is accepting international payments. If you are wondering why your favorite product or service isn't available in your country, the answer is often payments.

It is obvious enough why banks would resist a change of this kind. And as Andreessen makes clear, the more people consider Bitcoin to be a legitimate way to pay for things, the more likely it will be for the currency to succeed. It is to the credit of Wells Fargo (WFC - Get Report) that the bank has chosen to keep an open mind. It will host a discussion on the topic next week, its second this month.

Dimon may ultimately prove to be right when he says Bitcoin is "a terrible store of value," but let's at least be clear about one thing: he is hardly a disinterested observer.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
JPM $63.24 0.64%
WFC $54.36 0.57%
AAPL $127.60 2.28%
FB $83.09 2.87%
GOOG $535.38 2.16%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs