Jamie Dimon runs JPMorgan, the world's largest bank with a market cap over $367 billion. For the past year, he has opposed bitcoin—calling it a fraud and a money laundering tool. Ari Paul sees the pa
Jamie Dimon runs JPMorgan, the world's largest bank with a market cap over $367 billion. For the past year, he has opposed bitcoin—calling it a fraud and a money laundering tool.
Ari Paul sees the pattern. As co-founder of Blocktower Capital, a hedge fund devoted to cryptocurrency, Paul has watched Dimon's crusade from the opposite side. The reason Dimon fights bitcoin, Paul told Business Insider, comes down to institutional self-preservation. Bitcoin and other cryptocurrencies offer a cheaper path for wealth transfer than JPMorgan does. They bypass the offshore banking infrastructure that has generated most of JPMorgan's profits. Dimon understands this threat, Paul suggested—maybe better than Paul understands it himself. But instead of adapting, Dimon attacks.
That position shifted this week. On December 9th, Dimon told CNBC he had reconsidered his stance. "Look, everyone has a personal opinion about Bitcoin," he said. "I remain highly skeptical of it. But, as I've said previously, I'm open-minded to uses of cryptocurrencies if properly controlled and regulated."
The timing coincides with major changes in how Wall Street approaches digital assets. CBOE and CME Group, two of the world's largest options exchanges, are launching bitcoin futures contracts. Nikolaos Panigirtzoglou, JPMorgan's head of global market strategy, released a note on the significance. These contracts will add legitimacy to cryptocurrency, he argued. Institutional investors often wait for regulated derivatives before committing capital. Panigirtzoglou wrote: "In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class. The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here."
CME Group chairman Leo Melamed expressed the same view, seeing futures contracts as the gateway for mainstream finance to enter cryptocurrency markets.
JPMorgan announced this week it intends to clear bitcoin futures contracts for clients by late December, once CBOE and CME begin trading. The bank is positioning itself to serve this emerging market.
JPMorgan and its peers face a fundamental choice. Bitcoin and cryptocurrencies provide direct alternatives to the remittance, clearing, and capital transfer functions that have generated billions for traditional banks. Goldman Sachs has signaled its intention to support clients trading cryptocurrency. If other major banks refuse to build the infrastructure—if they deny their clients access—those clients will find competitors who serve them. The question is whether JPMorgan will participate in this market or cede it to rivals.
