That ruffled quite a few feathers. Alex Gurevich, the CIO of HonTe Investments who formerly ran macro at JP Morgan, had a few heated words for Dimon.
Jamie, you're a great boss and the GOAT bank CEO. You're not a trader or tech entrepreneur. Please, STFU about trading $BTC.— Alex Gurevich (@agurevich23) September 12, 2017
And in response to Dimon's comments, John McAfee, CEO of New York-based MGT Capital Investments and the founder of a antivirus software company, challenged Dimon on CNBC's "Fast Money."
"I'm a Bitcoin miner," McAfee said. "We create bitcoins. It costs over $1,000 per coin to create a bitcoin. What does it cost to create a U.S. dollar? Which one is the fraud? Because it costs whatever the paper costs, but it costs me and other miners over $1,000 per coin. It's called proof of work." McAfee further explained that miners invest "massive" amounts of supercomputing power and electricity in creating bitcoins. Surely then, there is value in creating a bitcoin, he added.
It is no surprise that McAfee is reacting to Dimon's comments with such fire. McAfee has a lot at stake after making a public forecast on Twitter and promising to eat his penis if the price of Bitcoin does not reach $500,000 in three years.
Of course, the Dimon comments are all the more fraught given JP Morgan's past history with cryptocurrency: it is no secret that JP Morgan Chase in the past had filed for a U.S. patent application for a computerized payment system that resembles some aspects of Bitcoin, the controversial virtual currency. The following tweet has been circulated.
There are a number of other Bitcoin fans who have been reacting very publicly to Dimon's comments. Jeffrey Van de Leemput, co-founder of BTC-finance and general partner at Cryptraders BV in the Netherlands who has been following cryptocurrencies from their inception, dismissed Dimon's claims as self-interested.
"The past several years, we have seen multiple cases where bankers and large corporates called Bitcoin a fraud," he said. "This is only a logical response from corporates who are actively trying to protect their market from outside threats."
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Commenting on Dimon's statement about Bitcoin being a fraud, Van de Leemput noted that banks may fear they'll soon become obsolete.
"One thing that comes to mind are postal offices," Van de Leemput said. "With the rise of email in 1990, a great panic broke out at multiple postal offices and many went bankrupt or lost a tremendous amount of business. The same thing is going to happen now in the financial sector, and it sure has all the banks on their toes - of course the banks know better.'
Van de Leemput highlights that a day after Dimon's statement, "JP Morgan posted a vacancy to hire a technical project execution manager for guess what? Blockchain."
David Drake chairman of LDJ Capital family office in New York who works with institutional investors and family offices globally entering the cryptocurrency fray, said Dimon isn't savvy enough when it comes to Bitcoin.
"Dimon just wants to be relevant and he has not done his home work," he said. "Maybe he can call us and we will sit down for a one on one to lay out the cryptocurrency ubiquity and utility."
Then there are those that agree with Dimon
Not everyone was angry at Dimon for his Bitcoin statements. Some want to accept that Bicoin could possibly be the real deal and become mainstream. Ben Yearsley, director at Shore Financial Planning in London, said he agrees with Dimon but admits that he has concerns he is not moving with the times.
"I have spent the last few months trying to work out whether there is substance behind cryptocurrencies, and at the risk of sounding old-fashioned I think it is a bubble," Yearsley said. "It is the ultimate fiat currency but with no government behind it, so what is it really worth it?"
"I don't think any investor should get involved in Bitcoin until they understand what it actually is and why it has value," said Aaron Voisine the CEO and Founder of Breadwallet. "After all, it pays no dividends, produces no earnings, does not yield rental income or interest, is not a financial obligation of any kind, and has no direct use to consumers. This is why people like Jamie [Dimon] or Warren Buffet, or other famous investors, haven't been able to figure it out."
Voisine explained Bitcoin is a pure monetary asset. It is a store-of-value. "So what is that?" he said. "There is always a need in any economy for at least one commodity that people hold, not to be used, but solely to be traded to someone else at a later date." He said that helps indicate that Bitcoin is a bubble.
Ultimately, until there is greater understanding of cryptocurrency from an investment standpoint and as a means of transferring funds extreme friction will remain between the Bitcoin evangelists and the investment banks.
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