He compared bitcoin with the tulip bulbs and said it’s a fraud, predicting it’s blow-up in coming years. He said, trading bitcoin is against JPMC rules, besides it is plane stupid. Dimon said he’s skeptical authorities will allow a currency to exist without state oversight, especially if something goes wrong. “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”
Jamie Dimon’s note, plus China ban on trading of virtual currencies on domestic exchanges have brought bitcoin rate slightly back under $4000 line during the last couple of weeks.
Interesting is, that JPMC invests about $120M in blockchain research annually, partially warming up the bitcoin optimism by acceptance of underlying blockchain technology. Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful. Still, he said banks’ application of blockchain “won’t be overnight.”
Bitcoin price has climbed more then 10 times during the last 2 years — this would have inevitably triggered blow-up discussions and it did. Fair to admit, that there is no known fraud or successful hacking attempt known to the public with regard to bitcoin since 2009. It is also remarkable, that bitcoin movement is very much driven by post-USSR area-based enthusiasts and Sergei Mavrodi, the MMM pyramid scheme author is among them now, known for warming up the Chinese bitcoin exchange back in 2015.
The value of bitcoin is different for the regular «fiat» currencies, based on the respective national economy sizes — it can be better compared with gold, having extraordinary qualities and limited supply. Same as gold, bitcoin has limited supply of 21M and it’s price is expected to climb even higher closer to the moment when the last bitcoin is mined. It’s extraordinary qualities are mainly in the area of security and protocol reliability, also supported by existing flexible de-centralized worldwide infrastructure, that enables quick bitcoin acquisition and disposal.
Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels. That didn’t end well.
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