Jamie Dimon, Warren Buffett Tell Investors to “Just Beware” of Bitcoin

Francisco Memoria
  • JP Morgan's Jamie Dimon and Berkshire Hathaway's Warren Buffett are known bitcoin bears.
  • During a joint interview, they recently told investors to "just beware" of the cryptocurrency.

JP Morgan’s chief executive Jamie Dimon and billionaire investor Warren Buffett are two well-known bitcoin bears who, on numerous occasions, slammed the flagship cryptocurrency. During a joint interview on CNBC’s “Squawk Box,” the critics told investors to “just beware.”

In the joint interview, CNBC’s host asked the two Wall Street giants which one of them hated bitcoin more. Buffett, the CEO of Berkshire Hathaway, was the first one to answer, saying:

“I set a high standard. I don’t know whether Jamie can top me or not.”

Warren Buffett

Warren Buffett seemingly criticizes the flagship cryptocurrency whenever he can. In the past, he’s called it a “mirage,” and argued that buying it isn’t investing. Moreover, the billionaire investor stated cryptocurrencies will come to a “bad ending,” and that bitcoin itself is a “real bubble.”

Last month, during Berkshire Hathaway’s annual shareholder meeting, Buffett and the company’s vice chairman Charlie Munger slammed bitcoin. While the chief executive compared the cryptocurrency to “rat poison squared,” the vice chairman compared it to “turds,” and “dementia.”

JP Morgan CEO Jamie Dimon replied to CNBC’s question right after Warren Buffett, stating:

“I don’t want to be a Bitcoin spokesman, you know. Just beware.”

Jamie Dimon

Dimon was notably one of bitcoin’s biggest critics. In 2015 he called the cryptocurrency a “waste of time,” while last year he labeled it a “fraud.” While facing backlash, he revealed he regretted his comments on bitcoin, and as its price grew claimed he no longer wanted to talk about it.

At the time, the Wall Street personality even claimed he would “fire in a second” any JP Morgan trader found to be engaging in cryptocurrencies, as it was both against the financial institution’s rules, and was “stupid.”

As CryptoGlobe covered, last month a former executive director at JP Morgan said that major banks are going to enter the crypto space “sooner than people probably think.” The financial institution, in late 2017, labeled cryptocurrencies a threat to its business model in an annual reported filed with the SEC.

Bitcoin Cruises Past $11000, but Where Is It Going?

Siamak Masnavi

With the Bitcoin price breaking through resistance levels like a hot knife through butter, it's time to take a moment to reflect on what's driving this Bitcoin price rally, where the Bitcoin price is going, and what dangers might be lurking over the horizon.

According to crypto data provider CryptoCompare, around 12:05 (UTC) on June 22, the Bitcoin (BTC) price went over $11,000 for the first time in 2019.

Here is the 24-hour price chart, which shows that the price at the time of writing (13:45 UTC) is $11,082. This means that the BTC price has surged 13.64% in the past 24-hour period:

BTC - 24 Hour CC Chart - 22 June 2019.png

Here are some more numbers you might find interesting:

  • market cap: $198 billion
  • return on investment (ROI) 
    • one week: 27.74%
    • year-to-date (YTD): 201.17%
    • five years: 1754.55%

What's Driving This Bitcoin Price Rally?

Although it is very hard to pin the reason for this latest price rally on any particular factor, it seems reasonable to assume that this rally is being driven by a combination of the following:

  • Facebook's Unveiling of Libra.
  • Fear of Missing Out (FOMO)

Earlier this week (on June 18), Facebook introduced project Libra to the world. Although not everyone in the crypto community agrees that Libra (LBR) is a cryptocurrency and/or that the Libra Blockchain it runs on is really a blockchain, the consensus seems to be that Facebook's official entry into the crypto space and all the publicity surrounding it in mainstream media will only help to introduce more people to the idea of cryptocurrencies and that over time these new people will discover why Bitcoin is widely considered the purest, the most important, and the most valuable cryptocurrency, as well as probably the best store of value (digital gold).

As Mike Novogratz, the Founder and CEO of crypto-focused merchant bank Galaxy Digital, explained on June 18, Facebook's Libra announcement is "stunningly important" because it has credentialized or legitimized the idea of cryptocurrencies. 

As for FOMO, on June 12, at this year's CryptoCompare Digital Asset Summit in London, Tom Lee, Co-Founder, Managing Partner, and the Head of Research at Fundstrat Global Advisors, reiterated his belief (supported by research done at Fundstrat) that "full blown" FOMO would start once the Bitcoin price goes above $10,000, and that if this happens, the BTC price would be "very likely" to reach $40,000 within five months.

It's not absolutely clear yet if we are quite back to the heady days of Autumn 2017, but if Bitcoin keeps up this momentum, it appears likely that even if the Bitcoin markets are not experiencing "full blown" FOMO already, we will get there soon.

Where Is the Bitcoin Price Going?

Now that the Bitcoin price has surged past $10,000, where is it going to stop? Well, it depends on whom you believe the most.

Tyler Winklevoss, Co-Founder and CEO at digital asset exchange Gemini, thinks that Bitcoin is on its way to $15,000:

If Tom Lee and his resarch is to be believed, Bitcoin could break its previous ATH (almost $20,000; set in December 2017) and reach $40,000 within five months.

Peter Brandt, prominet trader and author of the book "Diary of a Professional Commodity Trader", says that Bitcoin could be headed to $100,000:

If, as Brandt says, Bitcoin is "a market like no other", then it is impossible to know that how high it can go and how fast it can get there as long as the FOMO that currently exists continues building up.

What Dangers Might Be Lurking Over the Horizon?

Over the short term, it is inevitable that there will be pullbacks due to profit taking. Over the medium to long term, if any major countries, such as India or China, introduce new legislation that bans the ownership and trading of cryptocurrencies, that could cause a serious price correction (say, 10-20%), of course, but with the Bakkt and Fidelity platforms likely to formally launch later this year, Bitcoin's next block reward halving due to arrive around 21 May 2020 (and many miners already starting to hoard Bitcoin), and Libra expected to go live sometime in H1 2020, it looks like there are a lot more positive catalysts than negative catalysts for the Bitcoin price.

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