JP Morgan’s chief executive Jamie Dimon, who earlier this year labeled bitcoin a “fraud” and stated that it would eventually be closed because it was “not a real thing,” was recently slammed by Bart Stephens, co-founder and managing partner of San Francisco-based venture capital firm Blockchain Capital, who said he should “do some homework” on bitcoin.
Jamie Dimon’s initial comments, that included him saying he would fire any JP Morgan employee trading bitcoin because it was both “stupid” and against the bank’s rules, have been met with a lot of criticism.
So much so, that a former JP Morgan executive told him to “STFU about bitcoin,“ and that a managing partner for a bitcoin market trading firm, UK-based Blockswater, filed a complaint with a Swedish regulator against him, as JP Morgan became one of the most active buyers of Bitcoin XBT, a bitcoin tracker fund listed on Nasdaq Nordic, following his comments. Dimon then swung at bitcoin again.
Now, Bart Stephens sees Jamie Dimon’s comments as “hypocritical and ignorant” as, according to what he told Fortune’s Term Sheet newsletter, he was speaking to JP Morgan clients about cryptocurrencies, while Jamie Dimon was making those comments, as stated in his tweet:
He further referenced that other Wall Street CEOs, like Goldman Sachs’ Lloyd Blankfein and Fidelity’s Abigail Johnson, actually make constructive comments on cryptocurrencies and blockchain technology.
Stephens stated that blockchain and cryptocurrencies “elicited an emotional response from financial incumbents” and that the technology is, right now, controversial and misunderstood. That being said, he notably encouraged Jamie Dimon, and others, to “do some homework first,” he stated:
“I would encourage Jamie Dimon and others to do some homework first. It is not a fraud. It is not a Ponzi scheme. It’s a robust technology that is going to impact multiple industries in an additive way. Don’t discount it.”
To Stephens, Silicon Valley has been ignoring “the tsunami” for too long, as many of his friends who are at VC firms tend to dismiss cryptocurrencies and blockchain technology because they don’t spend enough time learning about its potential.
Bitcoin’s price isn’t a bubble
While speaking to Fortune’s newsletter, Stephens also addressed ICOs. To him, people are focusing too much on ICOs, and too little on the underlying idea of a tokenized network, which enables entrepreneurs to finance their businesses in new ways by producing a token on top of the Ethereum blockchain.
He also added that, just like any other technology, ICOs can be misused:
“Like all new technologies, ICOs can be misused. There will be fraud, just like there are frauds in the regular stock market. Just because a technology is misused or overheated doesn’t mean it’s not a really important technology. And again, the idea of tokenized networks is more important here, not the ICOs itself, the transaction which people tend to focus on.”
That being said, Stephens added that he believes blockchain technology is additive to the existing infrastructure, and will allow startups to take market share away from companies that choose to ignore the technology.
When asked how could a crash be avoidable if it was all just “one big bubble,” Stephens replied that, first, he didn’t think it was a bubble, and that if it was indeed a bubble, it wouldn’t hurt Wall Street and Main Street.
He further added that scale matters and given bitcoin’s $70 billion market cap, about the same market cap as PayPal, we would be talking about one of the smallest bubbles ever seen, when compared to the scale of other financial crises.