JPMorgan’s Sudden Bitcoin Bullishness is Concerning

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  • JPMorgan has changed its opinion on Bitcoin so quickly this year that it must have whiplash
  • Its has released numerous bullish reports on Bitcoin’s use case after years of denigrating it
  • Could the sea change be a case of positive manipulation after years of beating it down?

There was a time when JPMorgan, and especially its CEO Jamie Dimon, had its knives out for Bitcoin. As far back as 2015 Dimon was calling time on Bitcoin, since when he has said variously that Bitcoin is “going to go nowhere”, that it is “worse than tulip bulbs” and that he would fire any of his employees that owned any for being “stupid”.

How times have changed. Setting aside the fact that JPMorgan has become the first bank to issue its own cryptocurrency, it’s shift in attitude to Bitcoin this year has been nothing short of remarkable. The first seeds were down in June when the bank released a report that praised the cryptocurrency sector four bouncing back from its 51% March crash, saying it had passed its first “stress test” while still warning that it still remained a “vehicle for speculation”.

From Macbeth to Romeo and Juliet

Having wanted to do away with Bitcoin for over five years, what JPMorgan has been saying about the asset in 2020 can be equated to the Romeo and Juliet balcony scene. In October a JPMorgan analyst said that “Bitcoin could compete more intensely with gold as an “alternative” currency over the coming years” which was followed just a couple of weeks later by a report from the bank that investors were swapping gold for Bitcoin, seeing it as a better “alternative to gold”.

The bank was out there yesterday being publicly bullish on Bitcoin, with strategists from the bank saying that, “One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example”, alluding to the pension fund that bought up $100 million worth of Bitcoin last week.

JPMorgan and the Sinister Bitcoin Plot?

Many have been celebrating the stunning change of heart perpetrated by JPMorgan in recent days, but there could be a more sinister motive at play. Everyone knows that the media plays an enormous role in the life cycle of a market and the assets within that market. And equally, everyone also knows that big corporate players are pulling the strings of these outlets.

We have seen this before where mainstream media outlets have planted untruths or repeated misconceptions about Bitcoin at crucial points, with Jamie Dimon’s comments being a case in point – more than once, his negative comments have been splashed across the internet and the newspapers and the price has dumped.

What we know about the 2015-2020 period could be telling. It was revealed in May that not only had Dimon been holding secret meetings with Coinbase CEO Brian Armstrong back in 2018 but JPMorgan had also purchased a bunch of Bitcoin ETNs – exchange traded notes that track the price of Bitcoin. All this while Dimon was publicly slating Bitcoin.

It is not stretching the bounds of credulity to suggest that Dimon and JPMorgan were actively helping to push the price of Bitcoin down, knowing it was set for another massive bull run, and buying it up on the cheap at the same time. This rings true in part because JPMorgan metals traders were found guilty of doing this exact thing to the metals market in November 2018. If JPMorgan can manipulate the heavily regulated metals market then what can it do with an immature and reactionary market like cryptocurrencies?

Not a Solo Operation

Remember that JPMorgan are by no means alone in this – many influential players have come out in support of Bitcoin this year, both individuals and institutions. Of course not all of them are in the sway of JPMorgan, but the sudden love-in between traditional financial institutions and Bitcoin is starting to look a bit worrisome.

Of course if it evolves into a sustained bull market then so much the better, but knowing that the the likes of JPMorgan can pull the plug whenever they like, and that they will have the inside track on potential regulations and can act ahead of retail, is something worth having in the back of your mind over the next few years.