I haven’t posted since May, 2018 because I didn’t have anything to say. Bitcoin hit bottom (around $6k) three times since then and seems to be ever so gradually beginning to find a new footing. Paul Krugman, an intellect I admire and trust, has unfortunately been unable to understand Bitcoin. He almost systematically refuses to comprehend the advantages of a Bitcoin economy. In his column, Transaction Costs and Tethers: Why I’m a Crypto Skeptic, NY Times, July 31, he continues to expound upon his misunderstandings. Lo and behold, the first of the column’s comments comes from Jamie Dimon, CEO of J.P. Morgan, whom you might recall vehemently shouted “Bitcoin was a fraud.” less than a year ago. His very visible “BUY” is important. It goes along with other evidence that the cryptocurrency world is about to explode.
We’ve been waiting for the banks to build out the infrastructure they need to be able to profit from crypto. Until the banks figure out how they can profit from crypto, Bitcoin isn’t moving anywhere, soon. We’re almost there, now. For banks to profit from the handling, holding and hawking of Bitcoin several utilities must be put in place.
There needs to be a good, strong, secure, easy-to-manage place for banks to keep customer accounts. The software that does that is now readily available. There needs to be ways for brokers to buy and sell cryptocurrencies for their customers profitably. Speculation also requires additional instruments such as options and futures. These are now in place, too. There has to be a general consensus that crypto makes a good investment. Here, the banks may have done such a good job of putting down crypto that it is not easily undone, at least not quickly. That’s where Jamie Dimon’s words become so significant.
Dimon says, in a Paul Krugman blog comment, “Buy Bitcoin, folks.” Krugman is not known for his crypto enthusiasm; quite the contrary to be sure. He wasn’t asked or pushed to say anything. Why bother? Dimon has to undo years of negativity to launch this new banking endeavor. I read another investment bankers recommendation telling customers, “You should have seven per cent of your portfolio in cryptocurrency.” Times are a changin’. These are the signs I’ve been waiting to see. I’ll be writing more about further developments in crypto in the coming days.