Back in September, JPMorgan Chase CEO Jamie Dimon famously declared Bitcoin a "fraud," and the market for the cryptocurrency quickly by eight per cent. Then it recovered - by a lot. This week, Dimon said that he regrets the remark and he says "the blockchain is real."
Dimon's earlier assessment has become a common citation for anyone trying to shit on Bitcoin and cryptocurrency in general. At the time, he told the audience at a Barclays banking conference that Bitcoin is a "fraud" that "will blow up." He acknowledged that the price of Bitcoin could go to "$US100,000 ($127,327)," before it goes down, but said, "It's worse than tulip bulbs. It won't end well. Someone is going to get killed." He added that he would fire any trader at JPMorgan that bought or sold Bitcoin.
In September, Bitcoin was trading around $US4,000 ($5,093). But that was a million years ago in the Bitcoin world. It went on to hit $US19,800 ($25,211) in December, Venezuela and Russia are making their own digital coin, Wall Street dove in with Bitcoin futures, Goldman Sachs is planning a cryptocurrency trading desk, and this is all getting more interesting for Dimon. Well, maybe not more interesting, but he's decided not to dismiss it out of hand.
Today, Fox Business asked him if his feelings have changed. Dimon said that he now "regrets making" those comments. He only spoke briefly about those regrets, saying:
The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO's you have to look at individually. The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I'm not interested that much in the subject at all.
"The blockchain is real" has become the common refrain of Wall Street and banks. Odds are, Bitcoin will have little to do with what big money men intend to do with blockchain. Financial institutions are mostly working with Ethereum and Ripple for building out a blockchain backbone for transactions. But whether or not you agree that Bitcoin is a fraud, we can all enjoy the moment of watching Dimon's smug arse walk back his comments because the man has spent years being full of shit. Maybe you think the libertarian dream of a decentralised currency is an insane prospect, you'll get no argument from me. But the impulses that caused the Bitcoin crowd to go all in, and fall into whataboutism whenever faced with criticism, are because of pricks like Jamie Dimon.
Yes, our current system of currency is far better for everyday use than any crypto alternative out there. But our financial industry is completely depraved and the people who run it are unscrupulous predators who are rewarded for doing the wrong thing while being regarded as indispensable oracles.
It was under Dimon's watch that a trader who would come to be known as the London Whale managed to get the bank into a complex investment strategy that was so stupid, it cost the company $US6.2 ($8) billion in a year. The trader, Bruno Iksil, saw his life go down in flames, but he maintains that he was but a pawn in a scheme that was pushed by senior management. Two years later, Dimon got a big raise.
This type of lunacy (and the broader financial crisis of 2008) eventually led to the Volcker Rule being adopted. Though the rule is intended to save dopes like Dimon from themselves, and Dimon's own leadership is to blame for its existence, the Chase CEO has called it "unnecessary."
In 2013, when Elizabeth Warren told Dimon that she thought JPMorgan was breaking the law, he reportedly told her, "So hit me with a fine. We can afford it." Months later the bank settled the London Whale debacle for $US920 ($1,171) million. A couple of months after that it settled a case with the Justice Department over its bad mortgages for $US13 ($17) billion. The following year, it agreed to pay $US2.6 ($3) billion to settle charges that it wilfully looked the other way when facilitating Bernie Madoff's multibillion-dollar Ponzi scheme.
Yet, Dimon hangs onto his position, because he's right, JPMorgan can afford it. His bank keeps making profits. And in the aftermath of the enormous fines levied by the US government, JPMorgan just cut overall employee compensation and laid off 7,500 people. A couple of years later, Dimon received a 35 per cent pay bump.
And people keep listening to this arsehole. Dimon is an advisor to Trump in his efforts to repeal financial regulations that keep us from going through the misery of 2008 all over again. Last year, Trump said, "There is nobody better to tell me about Dodd-Frank than Jamie."
So, when Dimon said that Bitcoin is a fraud, he was full of shit. It might be a fraud, but don't come to that conclusion because of Dimon. His latest pronouncements that blockchain is real should be taken as just as meaningless. What's real is that our financial system is weighted to reward jerkoffs who got lucky. Those jerkoffs hoard the money, pass it on to little jerkoffs who get lucky or lose a bunch of money but still have enough to keep being jerkoffs. After cutting out of the interview with Dimon today, Fox Business host Maria Bartiromo said that Dimon told her his daughter bought Bitcoin at $US11 ($14) and now she thinks she's a genius. Bartiromo confirmed that his daughter is a genius. No, she's not, she's just another jerkoff, born lucky.