JPMORGAN’S “BITCOIN BIBLE”
The largest U.S. bank publishes crypto info package
Five months ago JPMorgan’s CEO Jamie Dimon called Bitcoin a fraud. He went as far as threating any JPMorgan trader caught trading cryptocurrencies with immediate termination.
After that something interesting and mysterious happened that we also reported on.
And less than half a year later, JPMorgan released an information package on crypto currencies. We would like to quote a few paragraphs from the 71-page-long JPMorgan “Bitcoin Bible”. This is how the largest U.S. bank sees Bitcoin and other crypto currencies in 2018:
In the introduction of the information package there is a general overall definition:
“/…/ Cryptocurrencies are virtual currencies that are created, stored and governed electronically by an open, decentralized, cryptography system. CCs can be used to exchange money, to buy certain goods/services or as an investment. There are over 1,500 cryptocurrencies with a market cap of some $400bn as of February 8, 2018, with Bitcoin being the largest representing a third of the market according to CoinMarketCap. /…/”
The technology section looks at how crypto currencies and transaction work:
“/…/ Crypto currencies are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat. The underlying technology for CCs could have the greatest application in areas where current payments systems are slow, such as across borders. /…/”
The 71-page-long documentation looks at the challenges that cryptos are facing or will face:
“It will be extremely hard for crypto currencies to displace and compete with government-issued currencies. /…/
Crypto currencies are experiencing heightened volatility and will face challenges from both technology (such as rising mining costs and hacking) and regulators. /…/
Security concerns have mounted in Bitcoin exchanges as hackers have infiltrated a number of crypto currency exchanges generating large losses. /…/”
“/…/ Transactions in the three largest crypto currencies average $550bn per month and come mostly from individuals. Ownership is highly concentrated. /…/ Blockchain saw its first expression through Bitcoin – the first crypto currency – but is more likely to ultimately see its greatest application outside of crypto currencies across other financial and non-financial transactions. /…/.
There is the potential for increased usage of Blockchain in cross-border payments, /…/ as well as the broader world of TMT, Transportation and Healthcare. /…/.
While about half of the early crypto currency transactions happened in the underground economy, the share of this is declining, with investing and speculation now taking a much larger share.”
The majority of the traditional finance system is still looking at crypto currencies with skepticism and pessimism. It’s promising to see that JPMorgan now represents the other end of the spectrum saying crypto currencies will definitely continue to attract investment, mostly from those who are dissatisfied with centralized and regulated finance.