Damon is a long-time Bitcoin critic. The bank’s president said in 2021, at the height of cryptocurrency valuations, that bitcoin was “worthless,” and doubled down on that sentiment last year in Davos when he told CNBC that the digital currency was an “overrated scam.”
Bitcoin is trading at just over $42,700, up more than 100% in the past year.
“This is the last time I’ll talk about this with CNBC, so help me, God,” Damon said. “Blockchain is real. It’s a technology. We’re using it. It’s going to move money, it’s going to move data. It’s powerful. We’ve been talking about it for 12 years as well, and it’s very young.”
“I think we’re wasting a lot of words on this,” Damon added.
The bank president went on to distinguish Bitcoin from the category of other cryptocurrencies, which are those through which blockchain technology has enabled the use of smart contracts. Smart contracts are a piece of programmable code written on a public blockchain network, such as Ethereum, that are executed when certain conditions are met, eliminating the need for a central intermediary.
“There is a cryptocurrency that might actually do something,” Dimon said of blockchain-rich smart blockchains. “You can use it to buy and sell real estate, transfer data, and encode the things you use.
“Then there’s a currency that does nothing,” Dimon said of bitcoin, though he added that there are real use cases for the virtual currency, which include upwards of $100 billion a year involved in fraud, tax evasion and sex trafficking. “I defend your right to deal with Bitcoin,” Dimon added, saying, “I don’t want to tell you what to do. So my personal advice is not to participate… but it’s a free country.”
The world’s largest cryptocurrency, which has a market capitalization of more than $830 billion, was cemented as an asset class last week when the Securities and Exchange Commission approved the creation of bitcoin exchange-traded funds.
Some of the biggest names in asset management, including BlackRock, Franklin Templeton, and WisdomTree, launched bitcoin ETFs last week. For the $30 trillion wealth management industry, the floodgates may be about to open. Analysts at Standard Chartered Bank expect fund flows in the range of $50 billion to $100 billion in 2024.
When asked what Larry Fink did to change his view on Bitcoin as BlackRock jumped into the spot ETF business, Dimon said: “I don’t care. So please stop talking about it.”
“I don’t know what he would say about blockchain versus currencies that do something versus bitcoin that does nothing,” Dimon added. “But you know that’s what makes the market. People have opinions, and this is the last time I’ll state my opinion.”