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Why Bitcoin’s market cap could be 100s of Billions according to Jamie Dimon’s use cases.

By October 25, 2017 No Comments

Half way September JP Morgan CEO, Jamie Dimon, called “Bitcoin a Fraud” which was one of the reasons the Bitcoin price plumed to < $3000usd back then but interestingly enough he actually mentioned 2 of Bitcoin’s biggest use cases in the same 1:45 minute conversation.

Value or no value, that’s the question?

There’s different theories about this. Does the technology itself hold any “real value” / “intrinsic value” or not? For the sake of this article we won’t go into this discussion but into some the use cases Jamie Dimon mentioned that look small but perhaps aren’t that small.

Jamie Dimon himself doesn’t believe Bitcoin has any value. I quote.

I don’t personally don’t understand the value of something that has no actual value

Which is interesting because Jamie Dimon also described some of the exact of use cases of Bitcoin.

The 1st Use Case that Jamie Dimon mentioned:

You can argue and I also know there’s a good reason for it (bitcoin) if you’re in Venezuela or Ecuador or North Korea you’re better off probably using Bitcoin than using their currency. It can’t possibly be true in the United States unless you speculate.

In my opinion this is exactly why Bitcoin could and arguably should have value. Though the United States is a huge economic super power it currently doesn’t have a “real use case for bitcoin”.

But let’s take a look at these countries.

  • Venezuela —GDP: $371 billion USD (source 2013)
  • Ecuador —GDP: $97.8 billion USD ‎(source 2016)
  • North Korea — GDP: $12.38 billion USD (source 2011)

These are countries that are currently in- and/or have a high potential to be in an economic crisis. There’s a whole bunch of countries that are in the same boat.

These countries are fairly small compared to some of the big economic powers in the west but hey, there’s some serious value potential here if you look at the GDP.

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is usually calculated on an annual basis.
source: Investopedia

Jamie Dimon’s argument: Governments like to control their currency

I personally do agree with Jamie Dimon on the fact that Countries like to control their currency. As Jamie Dimon noted:

Governments, the first thing they do is to form a currency, they like to control the currency, they control it through a central bank; they also like to know who has it; where it is; and where it’s going.

Eventually the government will shut this down.

But can/will the governments of these countries really shut down Bitcoin… Economic crisis come with Revolutions.

In times of Economic crisis any currency that doesn’t deflate “like crazy” becomes a necessity. Take Venezuela for example.

  • This is exactly what you see in countries like Venezuela. People risk “getting in jail” by mining bitcoin in order to make some money.
  • Despite Bitcoin’s fluctuations, Bitcoin is arguably more stable than Venezuela’s local currency the “Venezuelan bolívar”.
  • Since’s Bitcoin’s inception (2010) has outperformed every single fiat currency if you take the average growth per year. This sounds very lucrative for any citizen in a country in an Economic crisis.

In times of Economic crisis governments are usually replaced.
If people risk jail time in order to use an alternative currency that does perform way better than any other currency over the last 7 years (on average):

What type of government will gain most trust to become elected.

  • One that allows Bitcoin or doesn’t?
  • One that sees Bitcoin as a valid form of payments for it’s citizen or one that doesn’t see Bitcoin as a valid point of payment?

There’s your answer.

Side note: I didn’t go into the argument “If Government can actually shut down Bitcoin without shutting down the internet” I think the answer is “No!” but I do believe Bitcoin can make the usage of Bitcoin very difficult. Anyhow it’s not that relevant in relation to this article.

The 2nd Use Case that Jamie Dimon mentioned:

and also like I said the other reason of close down is because it’s use for illicit purposes and so it’s just not a real thing and eventually it’ll be closed.

Now this is obviously not a use case that any ethical person would favour. But it’s a use case none the less. Let’s take a look at this use case for the sake of this article.

Illicit purposes: Let’s take money laundering for example

Because of the clandestine nature of money-laundering, it is difficult to estimate the total amount of money that goes through the laundry cycle. The estimated amount of money laundered globally in one year is 2–5% of global GDP, or$800 billion — $2 trillion in current US dollars.
Source: United Nations

Now that’s quite a use case.

But is there any rational reason why governments would shut down Bitcoin if it’s used for Illicit purposes.

My initial logical answer would be “Yes!!!”.

But does it honestly make sense?

Before there was any Bitcoin, money was laundered in fiat currency. I can’t imagine any money launderers who would decide to launder more money now that there’s Bitcoin. Money Laundering is done anyway. Money launders launder money anyway. Money launders will find creative solutions anyway to circumvent the system.

I can’t imagine there’s any criminal who would decide to make less money out of Illicit activities because he/she can’t launder the money. Criminals will make as much money as they can anyway.

You can argue that it’s easier to catch criminals if they launder via Fiat currency but I honestly couldn’t find any resource that stated that the amount of money laundered worldwide decreased over the past years, neither I found any sources that it increased since Bitcoin’s inception but maybe I’m wrong here.

Bitcoin is more transparent than a Fiat Bank account which should actually make Money laundering harder.

Bitcoin is a fully transparent transaction medium. Once KYC/AML is implemented properly it’s significantly harder to launder money since all of Bitcoin’s transactions are fully transparent. Government needs to focus on implementing proper KYC requirements in order to practically have a higher change to decrease money laundering activities. Bitcoin is more of an answer to this than fiat in my opinion.

Conclusions

Listen carefully
I found it interesting that we don’t really listen to what one says. In this case Jamie Dimon basically explained 2 major use cases that describe a high potential in the growth of value for Bitcoin in just a “ 1 minute and 45 second conversation”. Yet, interestingly, everyone seemed to focus on the negative tone in the conversation.

Use case 1 — Countries with devaluating currencies: There’s a lot more countries that can likely be in a similar economic situation as: Venezuela, Ecuador, North Korea. It only takes 1 country which implements the Bitcoin Use case successful and others might value.

Use case 2 —Bitcoin being used for Illicit activities purposes. Illicit activities are a serious issue that no ethical person agrees with, but I don’t see that Bitcoin is enforcing these activities or would lead any criminal to the right path. If implemented properly it could actually limit illicit purposes due to it’s transparent nature.

On another note: Are you as excited about the Crypto Currency Market?

It would be great if you could help me out and let me know your thoughts on our startup: CoinCheckup.com — Categorised Crypto Currencies, Basic Fundamental coin analysis, Price predictions & Investment Stats.

Disclaimer

I’m not a financial advisor. This is not financial advise. Do your own research if you want to invest money in any crypto currency, including bitcoin.

Personally Bitcoin is not my number 1 coin. I think there’s a lot of community politics around the coin that could potentially destroy/devalue it. I could easily replace the term “Bitcoin” in this article with “Any cryptocurrency that might be successful in the future besides bitcoin”. But I didn’t for the sake of this article.

This article is my personal opinion. Feel free to disagree with me. Freedom of speach and such :-).

I tried to quoted Jamie Dimon properly and included the video but I’m not responsible for any (spelling) mistakes I made in my quotations. Feel free to listen to the video yourself and draw different or similar conclusions.