Bitcoin often finds itself under fire from some of Wall Street’s top brass. Jamie Dimon, who heads JP Morgan Chase, the most prominent bank in America, has branded it as fraudulent.
Speaking at a financial conference last year, Dimon declared that anyone involved in Bitcoin trading at his firm would face termination.
What’s Dimon’s beef with Bitcoin? He dismisses it as “foolish,” “hazardous,” and predicts a dismal future where it’s bound to implode.
When Deeds Diverge from Proclamations
Despite JP Morgan Chase’s vocal disapproval, there exists news report evidence pointing to the bank’s investment in exchange-traded notes (ETNs) pegged to Bitcoin’s value.
JP Morgan Chase, Image from Bitcoin.com
Nordnet’s public data revealed that JP Morgan Securities and Morgan Stanley bought nearly three million Euros in Bitcoin-tied ETNs.
Bitcoin ETNs serve as a popular choice for institutional investors seeking cryptocurrency exposure.
Several months after his harsh remarks on Bitcoin investors, Dimon made a mild retraction, admitting to Fox News his regret over dubbing Bitcoin a fraud.
Skepticism Prevails Amongst Legacy Finance Leaders
Ray Dalio of Bridgewater Associates, the largest hedge fund managing $160 billion, argues Bitcoin is too volatile to be a reliable store of wealth, favoring gold instead. He describes Bitcoin as highly speculative. Bitcoin is a bubble .”
Dalio is not alone. Warren Buffett, icon in investing and CEO of Berkshire Hathaway, critiques Bitcoin’s worthlessness as a non-producing asset.
Warren Buffet, Image from CNBC
Credit Suisse's CEO, Tidjane Thiam, dismisses Bitcoin as mere speculation and bubble-based trading.
Jack Bogle, of Vanguard Group managing over $4.5 trillion, advises avoiding Bitcoin, likening investment to buying a bubble built on hope of resale gain.
“Bitcoin might hit $20,000,” notes Bogle, “but it’s a mirage if it drops to $100.”
Why the disdain from traditional financiers? Are they uneasy about Bitcoin potentially undermining their business model?
Bitcoin is Viewed as a Disruption to Traditional Banking
Panos Mourdoukoutas from LIU Post suggests banks aim to stamp out Bitcoin before it destabilizes them.
Writing in Forbes He warns that Bitcoin could morph into a “people’s currency,” overshadowing national monies and stripping governments of their monetary influence.
This shift could ripple through, impacting the entire banking ecosystem. to control the economy Traditional banking practices could falter, disrupting interest-based income, paving the way for a novel peer-to-peer lending economy powered by Bitcoin.
Bitcoin presents unique strengths over traditional currencies.
Unlike fiat, Bitcoin’s capped supply at 21 million evokes the bygone gold standard era, limiting central banks’ inflationary control. fiat currencies that are issued Additionally, Bitcoin’s decentralized nature
frees it from the probing eyes of central banks, which manipulate their currencies’ values. doesn’t require a regulator Bitcoin’s regulatory framework relies on code and a distributed network, rendering central control obsolete.
This scenario may seem worrisome for banks and governments.
Bitcoin and fiat needn’t clash, as economist Apostolos Pittas believes in potential synergy. History from the 2008 crisis supports this blend.
The 2008 financial straits restricted credit, a gap Bitcoin could fill to cater to capital needs.
Ben Miller, founder of Miller Value Partners, spent 35 years at Legg Mason, outperforming the S&P 500 with his fund for over a decade.
Yet, Wall Street also harbors its share of Bitcoin advocates.
remarks that Miller’s hedge fund holds significant Bitcoin, contemplating risk management without necessarily liquidating assets.
Ben Miller, Image from Coindesk
A CNBC report Perhaps Goldman Sachs delivers the strongest endorsement of Bitcoin. The investment titan bank, fifth-largest in the U.S., has entered the crypto domain.
Circle, under Goldman Sachs’s wings
announced its acquisition of Poloniex, a prominent digital asset marketplace. Since 2014, Poloniex has grown into a major over-the-counter Bitcoin market. recently announced Tom Lee, a respected strategist on Wall Street, leads Fundstrat Global Advisors’ research, one of few firms setting Bitcoin price targets.
Bitcoin Prices in 2018 and Beyond
How does Lee forecast Bitcoin’s
future? His estimations weigh monetary expansion, gold’s currency ratio, and Bitcoin’s investment demand. future value Lee anticipates Bitcoin reaching $25,000 by the close of 2018. Looking further, Fundstrat predicts an astonishing $125,000 valuation by 2022.
Hailing from the UK, a fervent advocate of open-source innovation and blockchain’s potential for a fair digital world.
