Because JPM is a middleman, crypto removes middle man. Like all the car dealerships use legal means to prevent Tesla to sell cars directly to consumers without local shops.
It's not about fear of competition. Crypto doesn't remove the middle man. There are just other middlemen, but JPM also is not stupid and will figure out how to compete in this space. The new middlemen are folks like Coinbase, the other exchanges, middlemen like PayPal that are built on top of middlemen like Paxos. Regular people aren't going to using private keys to send money (where a typo leads to permanent loss) anymore than regular people are going to be coding in assembly on their machine to do addition and subtraction.
If there's really value in bitcoin and it becomes a thing, JPM will figure out how to help. Why? Because they are good at what they do, they have tons of clients and relationships. They add real tangible value to their clients. If middleman means "tangible value" then yeah, they're a middleman. JPM figured it out with currency markets, stock markets, bond markets, commodity markets, credit markets, equity derivatives - they figured it out with big institutional clients, with retail clients - they figured it out in simple products (buy EURUSD) and complex products (buy a 5 year forward knock out call option on EURUSD, contingent on SPX, quanto into Yen). I'm sure they'll figure it out for digital assets - if it truly becomes a market worth entering.
In the meantime, crypto has yet to add any real world value. What sane person takes a vacation to Tokyo and does anything other than use their Chase-issued Visa card (now available on your iPhone!) to buy stuff? Are you going to go there and pay with your bitcoin? Ridiculous. And guess what, the credit card route works instantly and it costs nearly nothing.
Where are the real use cases for crypto? Digital gold? Maybe. Weird trading card things, ok maybe. But real ones? Maybe they will come, but also maybe not... When internet/BBS came out to real people in the mid 1980s, even then (even then!), it was obvious that this was huge and had real value. People communicated, played games, etc. In the 1950s, business used computer to automate processes. We didn't need to wait until 1995 to figure out the internet (or computers) would eventually be huge. But with crypto, 10 years later, and nobody who actually understands traditional finance can articulate where crypto is better/faster/easier/cheaper, or any other use case. Maybe it will come, but I haven't heard it!
Have you seen Coinbase’s margins? They’re taking a bigger cut than any traditional financial actor, and the similar pricing from shops like Gemini suggest that the rest of the crypto industry is, also, rife with middlemen.
Those margins are absolutely incredible, Goldmanesque.
Heck it it were Goldman or JP Morgan running it, you have the CEOs dragged in front of congress being asked why they are robbing poor old grandma while she’s just trying to say trade cryptos
Those are middlemen for fiat-to-crypto transactions. No middlemen are needed for crypto-to-crypto transactions like with fiat-to-fiat transactions, with the exception of physical cash.
You gotta pay to get your transaction executed, the miners take that.
Right now transactions are heavily subsidized by the mining reward, at some point there will no longer be a mining reward so the whole thing will be only supported by transaction fees, and they are likely to be spectacular, even today with the low transaction volumes, actual transactions can sit in the mempool for quite some time before getting executed unless you pony up fees.
How do you figure? I've heard this before but I don't get it. If bitcoin is to be treated like currency, well, that would be in their wheelhouse right? And if bitcoin is to be treated as a speculative asset, that would also be in their wheelhouse?
My interpretation is that bitcoin is not "for the man", and therefor "the man" will not like or want it. But "the man" would trade in gilded gizzards if that would make them money.
Decentralized finance, in theory at least, undermines their power to determine the rules of the game: the decentralized nature of DeFi potentially dimishes the ability of financial lobbyists and the revolving door to influence regulation and policy. It also enables the lightning-fast rise of what would be serious competitors for JPM's customers. That's why I think that, if DeFi were to actually get big enough, companies like JPM would for a change start crying for MORE regulation. All in the name of protecting easily-swindled retail investors, of course.
If BTC does well, other cryptocurrencies will likely do well, which means DeFi will do well, which presumably means less people needing JPMorgan as an intermediary.
Can you explain that in smaller words, with more verbs? I'm also under the impression that a big smart contract went tits up recently and the establishment resorted to legal threats due to a huge loss of money which isn't confidence inspiring.
But more to the point, what would stop JPMorgan from getting in on the game if there was money to be made?
Nothing will stop JPMorgan from getting into the game who are trying to middleman / rent-seek from end users desiring a bridge from traditional finance to DeFi. However, as DeFi matures and new generations of users become accustomed to working directly with the technology, the role of the rent-seekers is systemically eliminated.
Long-term, it is in TradFi's best interested to oppose the emergence of DeFi. I predict they will use common and tired arguments to push for strong government regulations similar to those on TradFi, to encumber it and add to their own value-prop.
Also, some smart contracts can and will implode on occasion and that is fine. DeFi returns power (and responsibility) to the users, but as they are not used to having this level of responsibility there are bound to be losses here and there due to technical incompetence.
His opinion on things his job depends on failing should be taken with a grain of salt. Like a horse drawn carriage salesmen telling you cars are useless.
The guy is 65, has a net worth of $2bn. I genuinely don't think he gives a crap about bad mouthing bitcoin to save himself. He's won the game. At this point he's just trying to be credible and honest. There are crypto lovers who hear what he says, it hurts their emotions, so they rationalize his words as some sort of nefarious plot to subvert public opinion! But the explanation is simpler, it's just what he thinks.
It’s not a security. Bitcoin makes banks obsolete. Private Bankers and Central Bankers are quaking in their boots over Bitcoin. It undoes their damage. They are not longer needed.
