Bitcoin, decentralized pyramid? JP Morgan CEO Responds

In a US congressional hearing, JPMorgan CEO Jamie Dimon called Bitcoin and other cryptocurrencies a Ponzi scheme as the infamous US bank is one of the most active in the space blockchain.

Not a bitcoin fanatic, but blockchain is real

For years, Jamie Dimon, head of JPMorgan, a New York-based universal bank and the world leader in dollar trading, has never missed an opportunity to mock cryptocurrencies. We remember this statement from September 2017, in which Dimon describes Bitcoin as a “scam”. “It’s just not a real thing, it will be shut down eventually,” he said.

A few months later, Jamie Dimon said he regretted his comments and acknowledged the potential of the blockchain, not cryptocurrencies. He acknowledges that the technology is real. Recently he was asked to speak in the US Congress, and it seems that his position has not changed. He said bluntly: “I am a big skeptic about crypto tokens, you call them currencies like bitcoin. […] These are decentralized Ponzi schemes.”

After the collapse of the cryptocurrency in May and the collapse of the Terra blockchain and its stablecoin, many international regulators began to look into the situation with stablecoins, which faltered despite their promise of stability.

If Europe is moving in that direction with its proposed MiCa regulation aimed at regulating stablecoins, the United States is moving along with it as well. The United States continues to work on stablecoin legislation, and according to the latest bill presented by Bloomberg, it will be illegal to issue or create new “endogenously backed stablecoins.”

This is not the first time the JPMorgan boss has been critical of cryptocurrencies, especially bitcoin. In 2017, the latter accurately called the cryptocurrency queen a “scam” during the “bull market” phase (bull market), and later regretted his remarks a few months later.

Arguments that don’t work

To support his rhetoric, Jamie Dimon went on to talk about the loss of ecosystem capitalization while creating labels with unknown numbers in terms of ransomware, money laundering, and even sex trafficking.

As reported by Cryptoast, while BTC cannot be taken away from it, the price of which has actually fallen by 70% since last November, here are a few examples of traditional finance that are showing equally impressive losses in the global economic environment:

  • JPMorgan: -37% or $190 billion in capitalized losses since November 2021;
  • Amazon: -40% since November 2021, $756 billion loss;
  • Meta: -63% since September 2021, $647 billion loss.

Capitalized losses on these three stocks alone account for more than three-quarters of the $2 trillion lost to the entire cryptocurrency ecosystem.

While the devastating impact of the bear market cannot be denied, it is a reminder that cryptocurrencies are still a drop in the ocean of traditional finance and the current crisis is global.

These claims seem surprising given that JPMorgan is involved in the blockchain space. The latter even launched in 2019 its special token JPM Coin under its subsidiary Onyx, designed for payments and storage of cryptocurrencies.

Meanwhile, banking analysts remain relatively optimistic about the crypto environment despite the crypto winter. One of them, Takis Georgakopoulos, even thinks he has some interesting avenues to explore, including the tokenization of financial assets or even the metaverse and video games. Areas in which the bank intends to invest.

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