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Jamie Dimon tells Davos that Bitcoin is a ‘pet’ that does nothing except help fight fraud and money laundering
JPMorgan Chase CEO Jamie Dimon is done talking about Bitcoin, again.
In a CNBC interview From Davos, a visibly amused Dimon said he vowed not to give his opinion on cryptocurrency. When asked about the new Bitcoin ETF approved by the Securities and Exchange Commission last week, Dimon interrupted CNBC host Andrew Ross Sorkin, also of the New York Times, to say:
“So this is an important thing, this is the last time I’m talking about this on CNBC, so help me, God,” Dimon said to laughter from studio hosts Sorkin, Joe Kernen and Becky Quick.
This kind of exasperation has become a staple of Dimon’s when talking about Bitcoin. He said he would never talk about Bitcoin again since 2017.
Dimon continued his criticism of Bitcoin, saying “it doesn’t do anything.”
“I call it the pet rock,” he said.
Dimon later corrected himself by saying that he thought Bitcoin actually had some uses. It turns out they’re all illegal, whether it’s money laundering, fraud, tax evasion or paying for sex trafficking, he said.
There is evidence to support Dimon’s claim. The Government Accountability Office found that 15 of 27 commercial online sex websites it examined in a June 2021 study report digital currencies accepted. While the UN has issued warnings that cryptocurrency platforms are often used for money laundering by criminal groups in Southeast Asia.
Despite these concerns, the cryptocurrency market has been exceptionally strong in recent years after a near-death experience during 2022.crypto winter.” In 2023, the market capitalization of the entire crypto industry increased by 95%, although it is still down 35% from its all-time high during the pandemic. Additionally, the SEC’s recent approval of the ETF is a signal this crypto becomes a legitimate financial asset. And despite Dimon’s objections to owning cryptocurrencies himself, many retail investors do. A 2022 study found that 36% of millennials and 20% of total adults own cryptocurrencies.
Dimon’s Bitcoin Story
Over the years, Dimon has been outspoken about his dislike of cryptocurrencies, calling people who invest in Bitcoin “stupid“, and once threatened to fire any employee caught investing in it. Meanwhile, he referred to the asset itself as “fashion fraud» and a “waste of time”. At a Senate hearing in December, Dimon said that if it was up to him, he “close it”, prompting a surprised reaction from crypto-hawk Sen. Elizabeth Warren (D-Mass.)
Other major financial companies like black rock And Goldman Sachs had similar positions before changing their minds as crypto became more popular and lucrative. In 2020, Goldman Sachs published a analyst rating explaining why he did not view Bitcoin as a widely shared asset class in both Wall Street and crypto circles. And even if its investment director is still beware of BitcoinCEO David Solomon reported that Goldman Sachs would be interested in acquire crypto companies cheaply.
The story continues
When CNBC asked Dimon about companies that offer crypto products to their customers, he responded with the same disdain he reserved for the asset itself.
“First of all, I don’t care,” he told Sorkin. “So please stop talking about this shit.”
BlackRock CEO Larry Fink was once in Dimon’s camp as a staunch critic of Bitcoin, fearing that its use would be limited beyond criminal activity. In 2017, Fink referred to Bitcoin as “money laundering index” and that this only served to illustrate the scale of demand for this specific financial crime. But Fink would eventually change his mind. By 2020, he believed the market could become a global market. Fast forward to this month, when Bitcoin gained approval to become a spot ETF and BlackRock, the world’s largest asset manager, owns the third for the largest number of Bitcoins of any public enterprise.
Fellow asset manager Fidelity was an early adopter of Bitcoin. It began mining cryptocurrency in 2014, before launching its first trading platform in 2018. While BlackRock’s other competitors, State Street And Avant-garderespectively second and third largest global asset managers, have chosen to stay away from Bitcoin quite.
“The case for investing in cryptocurrencies is weak,” Vanguard told Bloomberg in December. “Unlike stocks and bonds, most crypto assets have no intrinsic economic value and generate no cash flow.
This line of thinking was similar to that of Dimon, who in his CNBC interview raised repeated concerns about Bitcoin’s ultimate function — outside of, as he put it, aid and encouragement of crime. Instead, Dimon sought to differentiate between Bitcoin and blockchain, the technology that allows Bitcoin to be exchanged without approval from a centralized agency. Bitcoin advocates tout the ability to trade the asset without having to rely on a bank or clearing authority as the main advantage that makes it different from any other currency or asset. According to Dimon, blockchain was useful for exchanging assets or data. Although he thought that even on this subject, enough ink had been spilled.
“It’s very small,” he said of blockchain. “I think we’ve wasted too many words on this.”
This story was originally featured on Fortune.com