Jamie Dimon, Cliff Asness say BTC only good for cyber-ransom

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BTC is a digital gold emperor without any clothing, and his royal head is on the way to the chopping block sooner than he knows.

On January 12, JPMorgan (NASDAQ: JPM) CEO Jamie Dimon told CBS News that his pejorative views on the values of the BTC token haven’t really changed much since he outed himself as a ‘crypto’ skeptic a decade ago. Likening embracing BTC to smoking, Dimon said, “I think you have the right to smoke, but I don’t think you should smoke.”

Dimon went on to say that he just doesn’t “feel great” about BTC. Dimon said BTC “has no intrinsic value,” although that’s something of an ‘eye of the beholder’ thing, as Dimon acknowledged that the token is “used heavily by sex traffickers, money launderers, ransomware.”

Dimon clarified that he wasn’t “against” the idea of digital assets, saying, “We are going to have some kind of digital currency at some point.” And Dimon remains a fan of blockchain technology, saying JPMorgan “is already using blockchain” for the purposes of “moving money, moving data.”

Dimon also put in a (relatively) good word for stablecoins, calling them “real” but warning that “how they’re used and how they’re protected by regulators is an issue they have to deal with.” Dimon may have been referencing last year’s JPMorgan report warning of the dominance of the Tether (USDT) stablecoin, the clear leader in terms of market cap (not to mention the real ‘crime coin’), and the threat this dominance poses to the entire digital asset ecosystem.

Dimon isn’t the only tradfi bully kicking sand in BTC’s face. On January 13, Cliff Asness, co-founder of AQR Capital Management ($100 billion in assets under management), went on CNBC’s Money Movers program to express his opinion that BTC’s current fiat valuation is as bubbly as bathwater.

“I’m on the bubble side, on net. To move me off that, you really need not a price change, but a use case.” Asness said. “The three uses I’ve identified for ‘crypto’ is speculating in crypto, war-torn countries and paying cyber-ransom. When we get a better use case… that’s what could convince me to become maybe more of a crypto person, when I find any use for it, aside from speculation and criminality.”

Asness added, “There’s no fundamental trend for crypto because I don’t know what the fundamentals are.” However, Asness dismissed the idea of shorting BTC anytime soon “because shorting things with 100% annual volatility can be a little scary.”

As we mentioned, Dimon’s antipathy towards BTC is nothing new, having repeatedly labeled/libeled the token over the years as “worse than tulips,” a “waste of time,” and warning that “if you’re stupid enough to buy [BTC] you’ll pay the price for it someday.”

Asness is also among those who’ve been calling BTC a bubble for years, suggesting at one point that “if a made up pretend money could feel embarrassed it would.” A year ago, he tweeted about BTC “soaring on, wait for it, the right to sell [BTC] to more people. Feels very ‘fundamental.’ Ponzi gotta ponzi.”

So, if these two are already on record calling BTC a scam preying on the gullible, why do they feel the need to restate these views? We suspect it’s because they sense this bubble is about to pop, that the laws of gravity are about to drag BTC back down to earth, and they want to make sure history records which side of this fiasco they were on.

Everybody ought to be warned

Whatever their motivation, it’s good to see mainstream financial figures expressing their views on BTC’s worth—or lack thereof. The token’s (brief) crossing of the psychological US$100,000 barrier in December seems to have discouraged/intimidated most critical takes on BTC’s lack of fundamentals.

BTC’s recent gains have almost entirely been due to one man. No, not Donald Trump, although fresh rumors of Trump’s ‘day one’ crypto-related executive orders helped rescue BTC from sinking below $90,000 this week.

No, we’re talking about MicroStrategy (NASDAQ: MSTR) founder Michael Saylor, who purchased 170,580 BTC tokens in just the past 10 weeks and now holds 450,000 of the things. (If you need a graphic depiction of Saylor’s not-so-invisible hand of the BTC market, this is pretty good.)

Saylor claims he’ll keep acquiring BTC until they pry the ‘buy’ button from his cold, dead hands. This is obviously unsustainable, which is why Saylor’s BTC evangelism is becoming increasingly unhinged. Since many retail buyers who got burned during the last bubble are avoiding BTC in favor of memecoin lottery tickets, Saylor needs other institutions and Trump to help shoulder this burden.

The longer it takes the crypto cavalry to arrive, the greater the likelihood that the wider public and mainstream media outlets will catch on that there’s no ‘there’ when it comes to BTC. We’re nearing that moment of reckoning, just like in August 1929—mere weeks before the stock market crashed and ushered in the Great Depression—when John J Raskob published his infamous investment article titled “Everybody ought to be rich.”

When the inevitable crypto crash comes, Saylor will go down in history as the bubble’s biggest loser (familiar turf, as it turns out). Saylor’s comeuppance will be epic, but there will be plenty of blame to go around.

Putin wins Nobel Peace Prize!

Among those most deserving of blame are the BTC Core developers who rejected the Bitcoin white paper’s description of peer-to-peer electronic cash. Instead, these developers made controversial protocol changes that resulted in BTC, an inert digital brick good only for speculation.

The team responsible for Bitcoin’s neutering included developers Greg Maxwell and Pieter Wuille, whose work should live in infamy alongside other dastardly sneak attacks. And yet, the pair were just awarded the Finney Freedom Prize by the Human Rights Foundation (HRF) for playing “pivotal roles in ensuring [BTC] remains robust, secure, and a practical tool for financial freedom.”

With all due respect to the HRF, it’s hard to think of a pair who’ve done more to harm the cause of financial freedom than Maxwell and Wuille. The constraints they imposed on the original Bitcoin mean users pay higher fees per transaction and wait longer for their transaction to be processed (unless they’re willing to pay even higher fees).

The world would have been a very different place had Bitcoin been allowed to take the utilitarian path laid out in the white paper. Instead, the world came to know BTC as ‘Bitcoin’ and was told that all it did was increase in value. There’s no putting that toothpaste back in the tube, but there’s still time to warn people of the financial peril that awaits them.

Writing on the wall

It’s hard to go against the grain, to be the one warning of the dangers ahead when everyone else is partying like it’s 1999. As Jamie Dimon acknowledged in his recent interview, despite his pejorative views of BTC, JPMorgan has dabbled in digital assets over the years, including participating in rival BlackRock’s BTC spot-based exchange-traded fund.

It’s the age-old dilemma facing those who can see the truth but who also see the reckless speculators making out like bandits: do you wanna be right, or do you wanna make money?

Regardless, we need to acknowledge those who’ve been sounding the alarm now—including this great read of the poisoned tea leaves in The Atlantic—because everybody will claim to have been on the right side of history after the bubble bursts and the damage is done.

While the financial hardship of the coming crash will be devastating for many, worse will be if legislators/regulators choose to throw out the baby with the bathwater, tarring all blockchain projects with the same brush, even those that prioritized utility over speculation.

Distinctions can and should be made between those who were part of the problem and those who were part of the solution. Between those who saw victims, they could exploit with rags-to-riches fantasies and those who saw the benefits that enterprise blockchain technology could bring to a wide variety of sectors.

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