There are many instances of CEO's coming out against new technologies.
The CEO of blockbuster famously said that Netflix is not their competitor. RIM CEO said that people only wanted to use a physical keyboard. The former CEO of Microsoft, Steve Ballmer said that the enterprise would never use the iPhone.
We all know how those statements turned out.
Now, Jamie Dimon, CEO of JP Morgan came out and firmly said that Bitcoin cryptocurrency "is a fraud."
"It's worse than tulip bulbs. It won't end well. Someone is going to get killed," he said at a banking industry conference organized by Barclays. "Currencies have legal support. It will blow up."
Dimon also said he'd "fire in a second" any JP Morgan trader who was trading Bitcoin, noting two reasons: "It's against our rules and they are stupid."
Whether he's right or wrong won't be apparent for at least another 5-10 years--and my opinion is biased, since I own both Bitcoin and Ethereum. So I reached out to three blockchain experts to get their inputs on Dimon's quote.
One of them, JP Thieriot, the vice-chairman of Uphold, had this to say:
"Incumbents are never good at seeing the very thing that's likely to devour them. If they were, Hearst or the Tribune Corporation would own the Internet, cab companies would own Uber and Lyft, and Hilton or Marriott would own AirBnB. Bankers might be the plumpest, most complacent incumbents ever. Every day we continue to realize just how retrograde, exclusionary and unfair the long-protected financial industry has become... and how unlikely it is to survive in the face of technologies that have abruptly presented a far better mousetrap."
Broadly, Thieriot is right: Incumbents have been historically bad at understanding what can destroy them. Another expert, Charles H. Silver, CEO of Alegbraix Data, echoed the same sentiment:
"He's talking his book. He doesn't make money off of Bitcoin right now and that is scary for him. There are many big players making big investments in the blockchain right now including the Goldman Sachs, UBS, and BNY Mellon. Legacy players like JP Morgan will always deny it's real until it starts impacting their business. His bold statement is pretty ironic considering that JP Morgan and Goldman Sachs just invested into a blockchain company, Axomi."
Jeff Carter, manager at West Loop Ventures and veteran angel investor, had a similar point of view--but he said Dimon might change its tune if the banking world ever turns to embrace Bitcoin:
"Dimon is not only speaking his opinion. He is also talking to his shareholders. He's reassuring them that the bank isn't dabbling in Bitcoin and exposing them. When the time comes for the mainstream banking world to embrace Bitcoin, JPM will lead the way. The problem today is they haven't figured out how they can become gatekeepers in the same way they control flows in the Forex markets. When they can charge a toll, they'll be there."
Dimon was passionate when he said Bitcoin is a fraud, and he took it a step further threatening to fire employees over trading Bitcoin. I can understand the trading aspect given the volatility, but making a bold statement like this can't sit well with JP Morgan employees looking to create better futures for their customers using technology.
A leader coming out publicly with this kind of statement might be a great thing for his shareholders, but it puts emerging employees in a tough position. Dimon just told his employees, in very clear terms, to not think about the future of the company.
He even took it further by threatening to fire them. If I were an emerging leader in that company, I'd think twice about sharing my ideas and thoughts going forward.
Is it okay for you to guide your employees to not trade Bitcoin? Sure.
Is it okay to threaten to fire them over it in a public manner? No, and it will cause the best employees to think twice about working for you.