Last week, Jamie Dimon, President and CEO of the largest bank in the U.S., JP Morgan Chase & Co. (JPM), said that Bitcoin is a “fraud” that he’d never touch.
He even went so far as to say he’d fire any employees trading this cryptocurrency, calling them “stupid.” And right after he made these comments, Bitcoin dropped 10%.
Now this isn’t the first time he’s said something bad about Bitcoin – and it won’t be the last, either.
The problem is… he’s completely wrong.
And his error now puts you at risk to miss out on what could be a trillion-dollar industry.
Wall Street’s Knee-Jerk Reaction to Bitcoin – and Why It’s Still a Hold
Bitcoin’s been around for quite some time – long before its featured presence on the upcoming new Star Trek television series. It’s not an actual coin or anything you can physically touch – it’s a digital asset that’s found within a peer-to-peer (P2P) computer networking payment system.
Users of this network are called “nodes,” and they verify Bitcoin transactions by solving complex computer algorithms. Once verified, these transactions are recorded on a public ledger called a “blockchain,” which is basically a virtual wallet. But there’s no one true central authority overseeing these transactions. And at the moment, there aren’t any government controls backing this digital currency, either.
When the first Bitcoin transaction was placed on January 12, 2009, its valuation was just pennies on the dollar. But in 2013, after the financial crisis in Cyprus exploded (and resulted in a shut-down of their banks and ATMs), many people within that region turned to Bitcoin. In fact, the buying volume was so massive – its price skyrocketed to over $260 per bitcoin. And by November 2013, it had increased by over 377%, peaking at $1,242 per bitcoin.
Now transactions between Bitcoin-using parties are more efficient and seamless than those facilitated using public and private keys for security reasons. These fund transfers are done with minimal processing fees, which in turn helps prevent the steep fees charged by most banks and financial institutions for wire transfers. Its success has also helped create a few other cryptocurrencies, like Litecoin, Namecoin, and PPCoin.
So, when it comes to Dimond’s recent statements, what else would you expect a bank guy to say? After all, one of the most attractive things about a cryptocurrency like Bitcoin is that it isn’t issued by any central authority. This makes it basically, in theory anyway, immune from government interference or manipulation.
Dimon was very careful during the Barclay’s press conference to separate the cryptocurrency from the blockchain technology behind it. This should come as no surprise, though, considering his company (along with 86 other corporate firms) helped create The Enterprise Ethereum Alliance, which is an open-source blockchain initiative. And JPM created their own blockchain.
On top of that, JPMorgan Chase Securities reportedly bought $35,000 of XBT (an exchange-traded note (ETN) listed on the Nasdaq Nordic in Stockholm) that tracks the value of cryptocurrencies, like Bitcoin. They’ve also been handling bitcoin-related trades for their clients – despite Dimon’s own comments last week.
Here we are – one week later – and Bitcoin has bounced back up to its current price of $4,035, as of the time of writing. So even though Dimon hasn’t been painting cryptocurrencies in a favorable light, some might say that the knee-jerk price dip actually created a buying opportunity for traders.
Other companies, like Fidelity, have also gone so far as to include Bitcoin in their charts and price quotes, as though it’s an actual asset:
Now there are a lot of people out there who believe that Bitcoin could very well replace the U.S. dollar by 2031 – that’s just fifteen years away. I won’t go so far as to say that Bitcoin is a “safe haven” for your money right now. But I do strongly believe that the technology behind the blockchain could be the reason a new global currency eventually replaces the U.S. dollar.
When the first Bitcoin transaction was placed on January 12, 2009, its valuation was just pennies on the dollar. But in 2013, after the financial crisis in Cyprus exploded (and resulted in a shut-down of their banks and ATMs), many people within that region turned to Bitcoin. In fact, the buying volume was so massive – its price skyrocketed to over $260 per bitcoin. And by November 2013, it had increased by over 377%, peaking at $1,242 per bitcoin.
You can look at Brexit as another powerful example of the growing demand for this “digital gold.”
Image sourced by www.bitcoincharts.com
At the time of the referendum (in June 2016) – but when all bets were on staying in the U.K. – Bitcoin dropped from $1,242.00 to roughly $585. However, as soon as the shocking results came in, Bitcoin shot back up to nearly $700, with its new lows around $585. Remember, while Bitcoin was soaring, the British pound and the stock market were taking a beating (and the pound still is). That’s just one of the many reasons Bitcoin’s been deemed “digital gold.”
So the way I see it is… if bitcoin is merely a fraud, with no real value, it wouldn’t be trading actively like it is.
There’s also a strong chance for Bitcoin to become a trillion-dollar asset. And the reason is… Bitcoin’s market cap is currently $65 billion. If it can hit the trillion-dollar market cap, then the coin would be worth more than 15 times what it’s trading at right now. That’s a big number – one I’d certainly like to benefit from.
Now there are many people on both sides of the Bitcoin issue… But personally, I’m in it for the long haul and will only get out if it starts to develop “Tulipmania.” This would be a scenario in which EVERYONE starts to scream buy (so there are only buyers in the market), which would trigger the contrarian trader in me to step in and start selling.
In fact, I was one of the early “miners” of this currency and have used my old mining machine to gather a nice chunk of Bitcoin as part of my overall holdings. Otherwise, my risk is quite low. So until we see Tulipmania happen, my mindset is to bury the mining machine and not worry about it.
To each their own… however, I’m holding my Bitcoin, despite the recent volatility. But if you’re looking for a chance to make fast cash, listen up…
Because when I say “fast,” I’m talking about putting money into a trade on Monday and taking out any well-earned profits by Friday.
Just click here to find out more.
To your continued success,
Tom Gentile
