By Michael Scott
The JPMorgan chief executive reiterated the criticism of Bitcoin as having no value despite the bank listing as an authorized participant in the spot crypto exchange-traded fund (ETF). James Dimon echoed the early December criticism of Bitcoin as a channel and medium facilitating the execution of illegal activities.
JPMorgan Rules Out Value in Bitcoin
Dimon reiterated the longtime criticism of the leading digital currency, citing Bitcoin as the preferred tool for criminals and tax evaders. He attributed Bitcoin as primarily utilized in sex trafficking and anti-money laundering besides terrorism financing. He added that Bitcoin lacks value besides facilitating tax avoidance.
Dimon heightened criticism against Bitcoin at a time when the largest global asset management firm, BlackRock, listed JPMorgan as its active participant in the amended ETF filing with the US Securities and Exchange Commission (SEC). The December 30 publication by Bloomberg revealed that Jane Street Capital and JP Morgan Securities LLC were its authorized participants in the revised spot Bitcoin ETF.
Dimon opposed the world’s largest digital asset by market capitalization while appearing in a Fox Business interview on Wednesday, January 10, staunchly opposed Bitcoin, declaring it as having no value.
Dimon informed the interview host Maria Bartiromo that though Bitcoin is the basis of the exchange-traded fund (ETFs) that the SEC was reviewing for approval, the product Bitcoin could flop.
Dimon informed Bartiromo that though the Gary Gensler-led SEC would approve the spot Bitcoin ETFs, they would likely flop. The ETF product is set to provide investors with a regulated channel to track Bitcoin’s price movement without direct ownership of the digital asset.
The JPMorgan chief warned that the widely anticipated Bitcoin ETFs could fail to live the hype. His perspective echoes the skepticism expressed by some analysts in December, as opposed to the view that spot Bitcoin could stimulate new capital inflow into the market.
The JPMorgan executive pointed to the low interest witnessed in Europe and Canada. Dimon informed Bartiromo that there is a lack of value in purchasing and selling Bitcoin.
Dimon’s Staunch Criticism of Bitcoin
Dimon’s staunch criticism against Bitcoin echoes his sentiments last month when he informed the US Senate Banking Committee of the need to shut down Bitcoin.
The executive responded to Massachusetts Senator Elizabeth Warren’s question on why criminals and illicit actors prefer cryptocurrency and that he would close crypto if he were the government.
Dimon advances the anti-bitcoin narrative, opposing its use as a store of value and payment form. Surprisingly, JPMorgan is advancing in the underlying blockchain technology project. It recently scaled the permissioned cryptocurrency identified as the JPM Coin and unveiled it in 2019.
Last fall, JPMorgan added a new payment feature to the JPM Coin, allowing funds transfer automation. The addition made it possible to remit funds and meet other financial obligations, including margin calls and overdue payments.
Dimon emphasizes that Bitcoin lends itself to illicit finance actors, particularly in sex trafficking and terrorism financing. He urges a crackdown on Bitcoin use in anti-money laundering and tax avoidance.
The JPMorgan executive dismisses the viability of Bitcoin ETF, indicating that it does not imply individuals are buying and selling Bitcoin, which he labels as lacking value.
JPMorgan Contradictory Position
The criticism conveyed by the JPMorgan chief ruled out the existence of intrinsic value in Bitcoin. Given its sustained pursuit of innovative means to participate in the digital assets sector, it places the bank in a contradictory position.
Dimon expresses personal qualms in the interview hosted by Bartiromo at a time when JPMorgan leads other Wall Street institutions in recognizing the surging mainstream adoption of crypto.
The approval of the long-awaited spot Bitcoin ETFs promises to legitimize crypto as an investable asset class. Growth in the crypto market will see other traditional financial (TradFi) giants boost crypto capabilities relative to the rising customer demand.
The criticism leveled by the old guards such as Jamie Dimon, is not slowing the adoption of crypto by the banks. The chief executive recognizes the increasing desire for Bitcoin access, illuminating the wait for a good ETF.
The contradictory position portrayed by JPMorgan portrays an institution enabling Bitcoin growth despite its leader condemning crypto. Such highlights the lingering tensions pitting traditional against decentralized finance.
The continued preparedness portrayed by JPMorgan shows that regardless of the individual executive’s stance, the institution considers crypto ETFs’ involvement and adoption of blockchain technology as unavoidable strategic opportunities.
Although Dimon pledges to eliminate crypto when offered the chance, prevailing market forces are acting beyond his control to demand JPMorgan’s participation in the digital assets sector.
It implies that banks whose clients develop an interest in Bitcoin lack a choice but to explore ways to facilitate such access. Such facilitation may occur even if begrudgingly, as in JPMorgan’s case.
Editorial credit: Lewis Tse / Shutterstock.com