In a US Congress hearing, JPMorgan CEO Jamie Dimon called Bitcoin and other cryptocurrencies a Ponzi scheme, as the notorious US bank is one of the most active in the space blockchain.
Not a bitcoin fan, but the blockchain is real
For years, Jamie Dimon, the boss of JPMorgan, the New York-based universal bank and world leader in dollar trading, has not missed an opportunity to mock cryptocurrencies. We will remember this statement from September 2017, in which Dimon describes Bitcoin as a “fraud”. “It’s just not a real thing, it will eventually be shut down,” he had said.
A few months later, Jamie Dimon said he regretted his comments and recognized the potential of blockchain, not cryptocurrencies. He admits the technology is real. Recently, he was asked to intervene in the US Congress and it seems that his positions have not changed. He said bluntly, “I’m a huge skeptic of crypto tokens, you call them currencies, like bitcoin […] These are decentralized Ponzi schemes”.
Since the cryptocurrency crash in May and the collapse of the Terra blockchain and its stablecoin ust, many international regulators have begun to investigate the case of stablecoins, which have faltered despite their promise of stability.
If Europe is moving in this direction with its proposed MiCa regulation aimed at regulating stablecoins, the United States is also advancing on its side. The United States continues to work on stablecoin legislation, and according to the latest bill seen by Bloomberg, it would be illegal to issue or create new “endogenously backed stablecoins.”
This isn’t the first time the JPMorgan boss has made critical remarks about cryptocurrencies, especially bitcoin. In 2017, the latter had precisely described the queen of cryptocurrencies as “fraud” during the “bull market” phase (bull market), before regretting his remarks months later.
Arguments that don’t work
In support of his rhetoric, Jamie Dimon went on to talk about the loss of capitalization of the ecosystem, while creating shortcuts with unsourced numbers in terms of ransomware, money laundering and even sex trafficking.
As Cryptoast reports, while BTC can’t be taken away from it, which has effectively seen its price drop by 70% since last November, here are some 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, loss of $756 billion;
- Meta: -63% since September 2021, loss of $647 billion.
The capitalized losses for these three stocks alone amount to more than three-quarters of the $2 trillion lost for the entire cryptocurrency ecosystem.
While there’s no denying the ravages of the bear market, it’s a reminder of how cryptocurrencies are still a drop in the bucket of traditional finance, and the current crisis is global.
These claims seem surprising when you consider that JPMorgan is involved in the blockchain space. The latter even launched in 2019 its specific token, JPM Coin, within its subsidiary Onyx, dedicated to payments and custody of crypto-currencies.
Meanwhile, banking analysts remain relatively optimistic about the cryptocurrency environment despite the crypto winter. One of them, Takis Georgakopoulos, even thinks he has several interesting growth avenues to study, including the tokenization of financial assets, or even the metaverse and video games. Areas where the bank intends to invest.
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Bitcoin, a decentralized ponzi? JP Morgan CEO responds
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