I think maybe there’s been some confusion about Jamie Dimon and Bitcoin.
As he will literally tell you if you piss him off, Dimon is “richer than you,” and he didn’t get that way by being an idiot.
Which is why generally speaking, he doesn’t want his employees trading cryptocurrencies when no one is looking. That’s the kind of thing that will get your ass fired, according to Dimon.
Make no mistake, Dimon is right about Bitcoin. Government is going to “shut it down”. It is a “fraud” of some stripe (although it seems clear that Jamie was taking some artistic liberties when he applied the term “fraud” back in September). And by some measures, it is “worse than tulips.”
But when I say there’s been some confusion about Dimon and Bitcoin, I’m referring to some of the reactions I’ve seen to a Wall Street Journal article published on Tuesday. In that article, the Journal writes the following:
J.P. Morgan Chase & Co. Chief Executive James Dimon has said that if any of the bank’s traders bought or sold bitcoin, he would “fire them in a second.”
But that isn’t stopping the bank from looking at business opportunities in the planned bitcoin-futures market. CME Group Inc., a Chicago-based exchange operator, is seeking to launch bitcoin futures by the end of this year, subject to regulatory approval.
J.P. Morgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit, a person familiar with the situation said. That means the bank’s customers could use it to place bets on whether the digital currency will rise or fall, while J.P. Morgan collects fees for such services.
Some folks have been quick to lampoon Dimon as though JPMorgan’s deliberations re: Bitcoin futures somehow represent Jamie caving on this issue.
That’s a laughable interpretation. Jamie Dimon is a gangster, goddammit. And this is how gangsters operate. If you don’t understand that, you’ve never been around any real ones.
You can have ideological qualms with a racket and still make money off that racket in the event you can find a way to do it at arm’s length. For instance, you might not want your actual underlings selling [XYZ] drug, because you happen to think that particular drug is abhorrent. But what you damn sure will do is have your underlings extort the people who are selling that drug, because they’re going to be selling it anyway, so why not strong-arm them into paying protection money for the privilege? That is simply how gangsters operate and it is a system that works extremely well (I mean, I wouldn’t know or anything, I’m just going by what I’ve heard).
That’s exactly what Dimon is doing here, although presumably no actual violence will be involved. This is precisely like a damn mob boss banning his soldiers from selling drugs but simultaneously instructing them to extort drug dealers for protection money. And besides, he’s already doing this. Here’s WSJ again:
J.P. Morgan already handles client trades of Bitcoin XBT, an exchange-traded note designed to track the value of the digital currency. The bank has said it doesn’t take positions in the note and simply routes customers’ buy and sell orders electronically to exchanges.
So before you go reading that Wall Street Journal article and thinking that it somehow represents Dimon capitulating, you might want to at least consider the possibility that Dimon is going to actually end up making more money trading Bitcoin than you are, only he doesn’t even have to actually trade it to get rich off of it.