Just days after he last laid into the cryptocurrency industry, JPMorgan Chief Executive Jamie Dimon is at it again. The Wall Street leader spoke about bitcoin and other digital currencies in an interview with CNBC-TV18 in New Delhi, India late last week, cautioning that governments may step in to shut down the industry if it grows too large. The most recent salvo comes on the heels of Dimon's comments earlier in the month, when he spoke out against the cryptocurrency space at an investor conference.
Cryptocurrencies are "Kind of a Novelty"
In the CNBC interview, Dimon explained his view that "right now these crypto things are kind of a novelty. People think they're kind of neat. But the bigger they get, the more governments are going to close them down." Dimon's concern seems to be centered on the major players in the cryptocurrency industry: Bitcoin, Ethereum, and the rise of the initial coin offering (ICO) craze, which may have contributed to a growing industry around the world. "It's creating something out of nothing that to me is worth nothing," he explained. "It will end badly."
Government Crackdowns Loom, Dimon Suggests
Dimon speculated that governments are likely to eventually step in to crack down on cryptocurrencies by exerting regulatory control. He predicted that anyone who buys or sells bitcoin may be subjected to imprisonment, forcing the digital currency world into an illegal black market space.
Previously, Dimon has called bitcoin a "fraud." The price of a single bitcoin dropped from more than $4,300 to below $3,000 in the days immediately after Dimon's latest comments. In spite of cases of extreme volatility such as this one, bitcoin's overall value has more than doubled over the course of 2017.
Dimon's comments prompted strong reactions from other investors in the cryptocurrency space. CNBC reported that the CEO and chairman of Sweetbridge, a blockchain company, said: "Comments like Jamie's show a failure to grasp the significance of the blockchain and the power of brand in a fundamental sea of change." At the same time, a company named Blockswater has formally filed a market abuse complaint in Sweden, specifically accusing Dimon and his firm of deliberately spreading misleading information about bitcoin.
Dimon's criticisms of bitcoin extended into its relationship with central banks. The executive explained, "with central banks, [the money] says legal tender: you have to take this as payment. It's very cheap to do, it's very easy to move back and forth. JPMorgan moves $6 trillion around the world every day very efficiently, very quietly, very effectively and very cost efficient. Creating money out of thin air without government backing is very different from money with government backing."