JPMorgan Chase CEO Jamie Dimon: Bitcoin Is Useless!

JAKARTA - Jamie Dimon, CEO of JPMorgan Chase, one of the largest banks in the world, has again issued controversial statements about bitcoin and crypto. In an interview with CNBC on Wednesday, January 18, 2024, Dimon reduced crypto potential as an investment and technology asset, and criticized the use of bitcoin for illegal activities.

Dimon admits that blockchain, the technology underlying crypto, is real and efficient. However, it says that blockchain is still very small and has not been widely used. It also distinguishes between two types of crypto: which have functions and which do not.

"There's a crypto that might be really useful," Dimon said. "If crypto has a smart contract in it, and then we can use it to buy and sell real estates, move data that might have value... map out the things you can do with it."

Smart contracts are protocols that allow automatic and trusted transactions without intermediaries. Some cryptocurrencies, such as Ethereum, Cardano, and Solana, use smart contracts to create decentralized applications (dapps) in various fields.

"And then there are useless ones, I call them ornamental stones, bitcoins, things like that," continued Dimon, mocking bitcoin as an asset that has no intrinsic value. "So in bitcoin... there is use: Anti Money Laundering (AML), fraud, money laundering, tax evasion, sex trafficking it's a real use. And you see it being used for... maybe $50 billion, $100 billion a year for that (around Rp 780 trillion - Rp 1,560 trillion). That's the ultimate use. The others are just people trading with each other."

Dimon reiterated his view that bitcoin is often used for illegal activities, such as money laundering and terrorism financing. He also considers bitcoin cannot function as a medium of exchange or a store of value, because of its high volatility and transaction fees.

Even so, Dimon respects people's right to invest in bitcoin, as long as they realize the risks. "My personal advice is not to get involved. But I don't want to tell anyone what to do. This is a free country," he said.

Do Not Care About Institutional Interests In Bitcoin

Dimon's comments come amid growing institutional interest in crypto, especially after the US Securities and Exchange Commission (SEC) approved the spot bitcoin exchange-traded funds (ETFs), which is an investment product that follows bitcoin prices in the spot market.

Several large asset management companies, such as Blackrock and Fidelity, have been involved in the crypto market, either by launching their own crypto products or by investing in other crypto companies. Blackrock CEO Larry Fink has even become one of bitcoin supporters, calling it an "attributable asset".

However, Dimon admitted that he did not care about the development. He also said that he did not know what Fink would say about the comparison between blockchain, functional crypto, and bitcoins that didn't work. "First, I don't care. So please stop talking about this," said Dimon.

"And I don't know what he will say [Larry Fink] about blockchain versus useful currencies versus unprofitable bitcoins... But you know this is what makes the market. People have opinions, and this is the last time I have expressed my opinion," concluded Dimon.

Blackrock launched the spot bitcoin ETF, Ishares Bitcoin Trust, last week with JPMorgan as the main authorized participant. The authorized participant is a financial institution that can create and redeem ETF units according to market demand.

Dimon has long been skeptical of bitcoin and crypto. In 2017, he called bitcoin a "fraud" and threatened to fire employees trading bitcoin. In December last year, he said that if he became a government, he would shut down cryptocurrencies.