J.P. Morgan Chase CEO Regrets Calling Bitcoin a Fraud

Late last year bitcoin and cryptocurrency markets began to swell and grow and as such draw the attention of major financial big shots like J.P. Morgan Chase CEO Jamie DimonDimon stated at the outset that he believed bitcoin to be a major fraud and a risk that investors did not need to take.

Dimon rescinds his statement

Fast forward to the beginning of 2018, Dimon has changed his tune. Now the CEO says that he does believe in the technology and the potential behind bitcoin as an investment, but that he is not certain how governments are going to feel about this type of currency. Dimon stated that the blockchain for cryptocurrency was real and sound, but that many governments are sure to have an issue with this type of exchange.

Blockchain technology helps to eliminate the need for a third party to be involved by opening a permanent record of the exchanges and transactions on a single network. This allows the buyer and the seller to interact directly which is helpful in some ways but that can also be troublesome if the investor does not know what they are doing or if they are not an experienced investor.

ICO Woes

The problem that he cites is that many cryptocurrency companies use what is called ICOs or initial coin offerings as a way to make the money they need for the initial investments to grow their companies. An initial coin offering is an exchange of some of the currency of a new cryptocurrency against those that are already successful like Bitcoin or Ethereum. This practice is somewhat dangerous for investors as there is no guarantee that the new currency is going to take off or be successful.

He Believes in Blockchain

So far, Dimon has only stated that he supports the technology behind Bitcoin, this may be because J.P. Morgan Chase is currently working on developing their own blockchain technology that will help to reduce the number of parties that are needed to be involved in their own global trading and exchanges. That being said, Dimon is still highly skeptical of any cryptocurrency at this time for the same reasons that China recently backed out of the market all together. It is difficult to maintain and to police a currency that is not really based in any one government and that is not backed by any one government either.

Dimon has not taken back his criticism of the cryptocurrency market all together and still feels that there is far too much risk involved for serious investors to place large amounts of money into this type of market. Bitcoin has been growing in these past few months and what started as a small venture has led to a huge growth. Dimon also stated that he was not all that interested in the topic at all despite the fact that he has made several comments on it over the past few months.

Time is the only factor that will tell what cryptocurrencies have in store for the average investor and the larger investor as well.

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