JPMorgan Chase CEO Jamie Dimon regrets calling bitcoin a fraud, but he still harbors doubts about the popular cryptocurrency's future.
"I just have a different opinion than other people," Dimon told Fox Business in an interviewed broadcast on Tuesday. Governments have a vested interest in controlling their money supply, he noted, and he remains concerned about how they'll react if digital coin poses a threat to sovereign currencies.
About 10 years old, bitcoin's value has skyrocketed in the past 12 months, climbing 14 percent to $14,855 in the first week of 2018 as both the Chicago Mercantile Exchange and the CBOE Futures Exchange offer futures contracts in it. The digital currency is generated when networked computers record and validate transactions in blockchain, a secure ledger accessible worldwide by multiple parties.
Despite bitcoin's apparent popularity, Dimon isn't alone in his skepticism. Trading in that and other so-called cryptocurrencies like Ethereum was prohibited in China last year by regulators who pointed to concerns about maintaining "economic and financial order." Indeed, hackers who have co-opted the computer servers of large companies through ransomware frequently insist on payment in bitcoin before they'll restore access to owners.
The Commodity Futures Trading Commission, which oversees markets for such contracts, noted when bitcoin instruments were introduced in December that it had only limited authority over them but had conducted "rigorous" talks with both the CME and the CBOE beforehand.
"Underlying cash markets and exchanges for bitcoin remain largely unregulated," Commission Chairman J. Christopher Giancarlo, an appointee of President Trump, noted in a statement. "Investors should be aware of the potentially high level of volatility and risk in trading these contracts."
Wall Street's reaction to the contracts has varied. None of the large investment banks trade in bitcoin themselves, and Dimon famously threatened to fire any JPMorgan traders who speculated in it.
Still, the largest of the companies are all futures commission merchants who connect buyers directly with sellers, and one, Goldman Sachs, has begun clearing bitcoin futures for some of its clients.
"Given that this is a new product, as expected, we are evaluating the specifications and risk attributions for the bitcoin futures contracts as part of our standard due diligence," the New York-based company said in a statement. Goldman is also exploring other ways to accommodate customer demand for bitcoin trading.