After Bitcoin’s chief critic, head of investment bank JP Morgan Chase, Jamie Dimon – who last October declared “People who buy Bitcoin are stupid” after previously calling the blockchain based value exchange system a fraud – subsequently had a change of heart this past January stating “I regret making comments saying Bitcoin is a fraud” and “The blockchain is real. You can have crypto yen and dollars and stuff like that.” hung up his hat on the crypto issue and vowed never to comment on crypto again, one would think that would be end of that discussion. Other prominent institutional leaders have popped up to fill the role of Crypto’s loudest critic.
The list of critics inadvertently vying for the now vacant title of Cryptocurrency’s Most Vocal Critic is populated by the incumbent financial system’s elite, from lawmakers to banking executives – which is hardly a surprise.
Carney, who holds the position of Governor at the Bank of England is not a believer in digital assets and reckons the technology that powers cryptocurrencies is where it’s at
He had the following to say about Bitcoin and other cryptocurrencies:
“For many reasons, the crypto-assets in your digital wallets are unlikely to be the future of money … But that is not meant to dismiss them. Their core technology is already having an impact. Bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better.” 03/02/2018
Mr. Jaitley is India’s Finance Minister. Under his leadership, Indian authorities enacted a ban on cryptocurrency exchanges in the West Asian nation.
Jaitley expressed his position on cryptocurrencies in his annual budget speech:
“India doesn’t consider cryptocurrencies legal tender, he continued on to state that India “will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system” while developing uses for blockchain technology. 02/01/2018
Who currently occupies the Prime Minister hot seat in the United Kingdom, is more concerned about how criminals can use cryptocurrencies to move and store value gained from illegal activities internationally.
May had this to say about Bitcoin in an interview with Bloomberg earlier this year:
“Cryptocurrencies like Bitcoin, we should be looking at these very seriously precisely because of the way they can be used, particularly by criminals,”
Former chairman of the United States Federal Reserve, who apparently has no faith in the longevity of Cryptocurrency and views it as a mechanism to bypass federal regulation stated:
“Bitcoin is an attempt to replace fiat currency and evade regulation and government intervention. I don’t think that’s going to be a success.” – 10/17/2017
Current Federal Reserve chairwoman echoes the sentiments of her predecessor and further states that “It is not a stable store of value, and it doesn’t constitute legal tender,” during a press conference in Washington.
She went on to say:
“It [Bitcoin] is a highly speculative asset, and the Fed doesn’t really play any regulatory role with respect to Bitcoin other than assuring that banking organizations that we do supervise are attentive that they’re appropriately managing any interactions they have with participants in that market.” 12/13/2017
One of the world’s most famous billionaires and Co-founder of the global technology giant, Microsoft, went from saying “Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than the currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.” back in 2014 to doing an almost complete about-turn this year.
He lit up media outlets and had crypto related forums abuzz with debate when he said:
“The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing. The Governments ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now cryptocurrencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way.” 02/27/2018
The Oracle of Omaha, a billionaire investor, and Chief executive officer of Berkshire Hathaway Inc. Warren Buffet, who notoriously stays away from technology-based investments because he admittedly doesn’t understand technology, seems to have understood enough to chime in regarding the meteoric rise of crypto, stating:
“People get excited from big price movements, and Wall Street accommodates … You can’t value Bitcoin because it’s not a value-producing asset. It’s a real bubble.” 10/29/2017
Last but definitely not least, Mr. Buffet’s second in command at Berkshire Hathaway Inc. Vice Chairman Charlie Munger, who holds no punches when expressing his distaste for Bitcoin and the general cryptocurrency market first said “I never considered for one second having anything to do with it. I detested it the moment it was raised,” at the Daily Journal Corp annual meeting in Los Angeles on 02/14/2018 “It’s just disgusting. Bitcoin is noxious poison.” he went on to say.
That proved only to be the beginning of the vitriol Mr. Munger would spew Bitcoin’s way as he called Bitcoin immoral, saying “Suppose you could make a lot of money trading freshly harvested baby brains. Would you do it, or would you say that’s immoral? You wouldn’t trade them, would you? It’s too awful a concept. Well, to me Bitcoin is almost as bad.” he told Yahoo Finance on 07/05/2018.
WHY ALL THE HATE?
Well, the negative rhetoric hurled at cryptocurrencies by financial powerhouses like Warren Buffet and Janet Yellen have done very little, if anything at all, to stem the growing positive sentiment of Joe Average and his global counterparts who are raising crypto uptake numbers and enthusiastically trading and holding various digital assets.
What makes blockchain and cryptocurrencies appealing is the transparency, convenience, and control they offer over legacy financial systems, which have a central point of failure. The comments from members of the incumbent system may stem from a lack of understanding or that they understand the threat this revolutionary new technology poses.
A recent Gartner survey reporting that only 22% of global Chief Information officers actually have a crypto related plan in place for their respective firms’ growth plans, suggests that a degree of ignorance may be in play.
Whether it’s ignorance, lack of faith or a threatened reaction to new technology. It is clear that, short of a total implosion of the entire crypto market, blockchain and crypto assets will dilute the influence of many a financial institution and possibly leave fiat virtually valueless. Where would that leave the Mungers and Jaitley’s of this world?