Why Bankers Dont Like Bitcoin

By Shae Russell – Markets & Money.

Bitcoin is ‘stupid’ and ‘will blow up’.

Or so says top brass at JPMorgan, Jamie Dimon. He adds: ‘If we had a trader who traded bitcoin, I’d fire him in a second for two reasons. One, it’s against our rules. Two, it’s stupid.’

Likening bitcoin’s rapid rise to the Dutch tulip mania of the 17th century, Dimon frames the crypto’s rise as ‘fraud’. He was quoted yesterday as saying, ‘It won’t end well. Someone is going to get killed.’

That’s a tad dramatic. But, unsurprisingly, the price of bitcoin tumbled after his statements.

Have a look at bitcoin’s decline in the past day…


Source: CoinDesk
[Click to enlarge]

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The Irony of a Billionaire’s Hatred for Bitcoin

By Sam Volkering – Money Morning.

When it comes to Wall Street heavy hitters, Jamie Dimon is one of the biggest. He’s the CEO at JPMorgan.

You remember JPMorgan right?

No?

OK, here’s a refresher.

JPMorgan is the bank that helped create those really complex mortgage bond products in the 2000s. JPMorgan was one of the crooked banks that then packaged them up, bundled them together and created Collateralised Debt Obligations (CDOs).

JPMorgan was one of those banks that fraudulently engineered those products. And they were one of the kingpins of the entire 2008 debt crisis, the housing collapse in the US, and the global market crash.

JPMorgan was one of those banks that were ‘too big to fail’. Except on the brink of extinction they sat. That is until the taxpayer bailed them out. That’s right, the taxpayer. The average person helped bail out these Wall Street crooks. But did they get a choice? No. Central powers — friends of Wall Street, the government — made that decision for them.

And while taxpayer money bailed out banks like JPMorgan, who do you think was left to pick up the pieces? Who do you think was hit hardest by the debt crisis, the recession, and the housing collapse? Who was left in the wake of it all, while the likes of Dimon escaped unharmed?

Was it the bankers and the fraudsters, the ones who started the mess? No. Sure a few might have lost jobs. The million dollar bonuses dried up, for a year or two.

But did they really suffer? After creating one of the biggest financial crises in history. Do you reckon fat cats like Dimon really had anything to answer for? Of course not. That’s not how the system works.

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The Secret Code for Crypto Profits.

By Ryan Dinse – Money Morning

I write a lot about cryptocurrencies. But with good reason.

I firmly believe that there’s never been such a unique, fascinating and game changing investment opportunity. And I don’t think there ever will be again. At least not in my lifetime.

Of course not everyone agrees with that. In fact, it’s still the minority view.

Bitcoin is nothing more than a classic bubble according to Nobel Prize winning Yale university professor, Robert Shiller.

The best example (of a bubble) right now is bitcoin. And I think that has to do with the motivating quality of the bitcoin story. And I’ve seen it in my students at Yale. You start talking about bitcoin and they’re excited!’

Incidentally, Shiller wrote a seminal book on speculative manias, Irrational Exuberance. It was a deep analysis of the dramas over the centuries in which otherwise sane people drove prices for tulips, stocks, and houses to inexplicable heights.

He clearly knows a thing or two about bubbles.

But when asked in the same Quartz interview what he thought of ICOs (Initial Coin Offerings — the crypto equivalent of an IPO), he replied, ‘What’s an ICO?’

That makes me think the professor hasn’t done the required reading!

Anyway, time will tell who ends up right…

And I don’t want to be accused of merely being a cheerleader and writing only when things are going well.

In the last few days we have seen some big falls in the prices of most cryptocurrencies.

I’m talking 60%+ falls in 24 hours in some cases.

Why?

Like most economic outcomes these days, it’s all to do with China.

The Chinese regulator came out with a statement on Monday saying that all Initial Coin Offerings (ICOs) were illegal under Chinese law. Given the fact that most of the recent ICO hype has driven the crypto price rises across the board, this statement had a predictable effect.

Prices fell as some investors panicked. Traders used it as an excuse to bank some profits on the recent price rise.

It’s not just about being right

So am I concerned? Is the bitcoin bubble about to pop? A Ponzi scheme about to collapse?

No. I don’t think so.

Consider the following.

Australian Interest Rate 07-09-17 Source: Howmuch.net
[Click to open new window]

The graphic is slightly off, as Bitcoin is now worth $71 billion and the entire cryptocurrency market is around $170 billion. But the comparison still makes sense.

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Bitcoins, Tulips, and the Straw Man

 

 

By Sam Volkering – Money Morning.

There is a lot of ‘grave dancing’ going on.

Earlier this week bitcoin and ethereum prices were in freefall. The crypto-cynics were rejoicing. From highs of US$5,000 and US$400 respectively prices ‘plummeted’ to US$4,000 and US$300.

Why?

Well partly due to psychological resistance at those high values. And part in response to a global crackdown on cryptocurrency by governments. In my view, it’s quite likely automated trading had a hand in it all too. The big question is, should you worry?

To put it simply, no.

This is affectionately known as ‘tree shaking’. It’s part of the crypto game, to see who will fall from the tree and who’s going to stay up there. Remember, this is a long term financial revolution. It’s not about short term gain.

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Bitcoin, Sour Grapes and the Institutional Herd

By Charles Hugh Smith – Blog.

The point is institutional ownership of bitcoin is in the very early stages.

If I had a bitcoin for every time some pundit declared bitcoin is a bubble, I’d be a billionaire. There are three problems with opining that bitcoin and cryptocurrencies are bubblicious:

1. Everything is in a bubble now: stocks, bonds, housing, heck, even bat guano is bubblicious. Exactly what insight is being added by yet another guru repeating the BTC is a bubble meme?

2. What’s the value proposition in declaring BTC is in a bubble? Spotting bubbles is like shooting fish in a barrel; the value proposition is in identifying the price/time tipping point at which bubbles pop.

3. Declaring bitcoin is a bubble is starting to sound like sour grapes. Sour grapes defined: those who missed the 10-bagger (never mind the 100-bagger) feel better by dismissing the whole thing as a fad and a bubble, but as BTC continues marching higher, it looks like they missed the boat but are too proud to admit they didn’t grasp the significance of cryptocurrencies and BTC in particular.

For those who don’t know what the fuss is about, here’s a one-year chart of bitcoin (BTC). Note the increase from $500 to $5,000 ($4.500 as I write this). Some initial coin offerings have made gains that make this mere 10-bagger look like small change.

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