Is Bitcoin a Fraud?

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Methinks the Wall Street bigwigs protest too much!

Bitcoin has come under selling pressure in recent weeks because entrenched Wall Streeters have launched a full-frontal assault on the flagship cryptocurrency.

That includes the likes of emerging markets pioneer Mark Mobius, bond king Mohamed El-Erian and Nobel Prize-winning author of Irrational Exuberance Robert Shiller.

Things really hit a crescendo when JPMorgan Chase CEO Jamie Dimon claimed that bitcoin is a fraud. He went on to arrogantly say he would fire any employee speculating in that currency market.

We’ll see if he’s a man of his word.

The fact is countless hedge funds focusing exclusively on cryptocurrencies are popping up all over Wall Street. It’s only a matter of time before the trend comes to JPMorgan. When it does, I’m betting Dimon will miraculously change his tune. After all, I’ve never met a banker that does love more fees.

Bitcoin’s sell-off continued when JPMorgan’s global head of quantitative and derivatives strategy, Marko Kolanovic, said, “The whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes.”

Way to be a good soldier and butter up the boss, Kolanovic!

At the same time the critics are coming out in droves, financial regulators in China are doing their best to slow the growth of the cryptocurrency movement by shuttering all exchanges in the country.

My advice? Ignore all the hate and obstruction.

Whenever disruption occurs, the incumbents that stand to lose the most always violently protest and badmouth the disruptor.

Remember, when Apple launched the iPhone in 2007 and Microsoft’s former CEO Steve Ballmer said, “There’s no chance that the iPhone is going to get any significant market share. No chance.”

How’d that work out for you, Mr. Ballmer?

It’s no different with cryptocurrencies. The parties that stand to lose the most are spewing the most hate. This is all rather predictable. But before long, they’ll come around. That is, once they understand their true disruptive power.

As Ripple CEO Brad Garlinghouse notes, the world has barely begun to understand cryptocurrencies.

The fact that they haven’t figured it out yet creates a huge opportunity for tuned-in investors.

And the upshot of the recent high-profile criticisms of cryptocurrencies is an increase in volatility, which you can use to your advantage to buy more cryptocurrencies on the cheap.

Regards,

Louis Basenese
for The Daily Reckoning

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